The Wall Street stoner

Was the Wall Street Titan James Cayne smoking dope as losses at his Bear Stearns hedge funds triggered the 'sub-prime' financial crisis?

That is the word buzzing around the trading rooms, as if it was not bad enough for Cayne (left), 74, that he lost a walloping $467m of his own fortune by the time he stepped down as chief executive last month.

He denies it. He denies, that is, that he was inhaling on that particular weekend last summer when Bear Stearns announced its precipitous loss while he was far from the levers of financial power, playing in a bridge tournament.

He does not actually deny smoking dope, telling reporters that he will respond only to "specific allegations" such as the one he did deny.

The Wall Street Journal turned on him last November, accusing him of using bridge and golf as "an escape”, causing Bear Stearns' funds to collapse. News that he likes to bliss-out at the end of bridge tournaments comes from his fellow players.

Dope makes a change. In the early 1980s anyone worth his annual bonus was tooting cocaine to stay sharp for spotting profits. They staggered from the markets to toot some more in the washroom at Odeon, the downtown bistro immortalised in Bright Lights, Big City, the Jay McInerney novel.

Cayne began humbly as a travelling salesman for office copiers, scrap iron and municipal bonds. It was his world-class talent for bridge - he has won more than a dozen national championships and played for America in 1995 - that put him on the fast track. Fellow aficionado Alan Greenspan was so impressed he hired him as a stockbroker at Bear Stearns.

Cocaine accelerates the mind, marijuana relaxes it. A man who has stayed 'on' for 50-odd years of Wall Street and bridge would appreciate that.

But a CEO managing hedge funds needs to choose his poison carefully. Warren Buffet (left), the Sage of Omaha, used his own druggy metaphor last week to hand down some wisdom on 'derivatives' and 'complex investments'.

"It is sort of a little poetic justice," he said, "that the people who brewed up this toxic Kool-Aid found themselves drinking it at the end." Kool-Aid? This powdered drink was made famous in the mass suicides of the Jim Jones cult in Guyana, and by Tom Wolfe in his book Electric Kool-Aid Acid Test as the medium for dosing hippies with LSD. Is Buffet telling us something?

Cayne can still afford his pleasures. He has lost his place at number 384 in the Forbes 400, but still has 5,658,591 shares worth $496m at the closing bell. ·