STREET’S BAD-BOY FIRM GOT ITS COMEUPPANCE

The rarified world of economists at the Federal Reserve got to settle their long-simmering grudge against Jimmy Cayne for turning his back on them a decade ago in a scary crisis of an earlier era.

When the Fed in 1998 was putting together a rescue group of 15 banks and Wall Street firms to bail out the disastrous hedge fund collapse of Long-Term Capital Management, the cigar-chomping chairman brushed them off, saying he “wouldn’t put a nickel” into the rescue.

He also got into nasty arguments with counterpart executives at other banks in the Wall Street club’s bailout of LTCM, forever marking himself as an outsider with few friends in the regulatory ranks, say veteran street watchers.

While some call it revenge of the nerds, others say Bear Stearns deserved to be seized and placed under the control of rival bank JPMorgan Chase – because it’s become the poster boy of Wall Street plunder in the subprime mortgage crisis.

It was Bear Stearns that pumped out record amounts of the junk paper derivatives tied to the shaky mortgages. And it was Bear Stearns that opened the Pandora’s box of contagious subprime toxicity when its two hedge funds collapsed from choking on its own junk paper last summer.

Cayne always encouraged his cowboy crowd of colleagues to go for broke with almost any kind of risk.

Aside from the broader financial impact, experts said few on Wall Street will shed any tears over the demise of the hard-nosed firm.