Too Big to Fail [308]
Fleming had helped broker a 2006 deal to merge Merrill’s $539 billion asset-management business: On February 15, 2006, Merrill Lynch agreed to sell its investment managers business to BlackRock in exchange for a 49.8 percent stake in the combined company. “Given its complexity, the transaction was put together quickly, helped by the close friendship that Mr. Fleming, who took BlackRock public at a price of $14, and Mr. Fink enjoy.” Landon Thomas Jr., “On the Menu for Breakfast: $1 Trillion,” New York Times, February 16, 2006.
“Everyone is shrinking their balance sheet”: Joseph A. Giannone, “Merrill CEO Wants Ongoing Fed Access, Rules Reform,” Reuters, June 10, 2008.
“We all have concerns about what we read in the papers”: Joe Bel Bruno, “Merrill CEO Sees More Industry Consolidation,” Associated Press, June 10, 2008.
Merrill’s shares down 32 percent for the year: Tenzin Pema, “Merrill Lynch Outlook Cut at JP Morgan,” Reuters, June 11, 2008.
who was sometimes referred to as “I-Robot”: “Stiff, cerebral and intimidating, John Thain is not a ‘people person.’ Behind his back his nickname is ‘I Robot.’” See Dominic Rushe, “The IRobot Rides In to Sort Out Merrill Lynch,” Sunday Times (London), November 18, 2007.
Fink, ironically, had lead the exchange’s search committee that selected him: Kate Kelly, Greg Ip, and Ianthe Jeanne Dugan, “For NYSE, New CEO Could Be Just the Start,” Wall Street Journal, December 19, 2003.
shutting the wood-paneled Luncheon Club and firing the exchange’s barber: Asked about his firing of the NYSE barber, a kindly old man who made $24,000 a year, Thain said: “The barber was a very nice guy who’d been there for a very long time…. [I]t’s difficult to argue that a publicly traded company needs to have its own barber.” Gary Weiss, “The Taming of Merrill Lynch,” Portfolio, May 2008.
when he interned at Procter & Gamble: Justin Schack, “The Adventures of Superthain,” Institutional Investor—Americas, June 14, 2006.
“When he made conversation”: Lisa Kassenaar and Yalman Onaran, “Merrill’s Repairman,” Bloomberg Markets, February 2008.
“Would it hurt you to suck up to me once in a while?”: Ibid.
“So, I think you said before that you’re comfortable”: Deutsche Bank analyst Mike Mayo, asked Thain during a conference call. “John A. Thain, Chairman and Chief Executive Officer–Merrill Lynch, to Participate in a Conference Call Hosted by Deutsche Bank on June 11—Final,” Fair Disclosure Wire, June 11, 2008.
“At the end of last year when we were looking to”: Ibid.
having heard him repeatedly say, “We have plenty of capital”: On March 8, 2008, Thain told France’s Le Figaro: “Today I can say that we will not need additional funds. These problems are behind us. We will not return to the market.” To the Japanese Nikkei Report on April 3, he said: “We have plenty of capital going forward, and we don’t need to come back into the equity market.” At a news conference in Mumbai on May 7: “We have no present intention of raising any more capital.” See Nick Antonovics, “Merrill CEO Says Won’t Need More Capital,” Reuters, March 8, 2008; “Full Text of Interview with Merrill Lynch CEO John Thain,” Nikkei Report, April 4, 2008; John Satish Kumar, “Credit Crunch: Merrill’s Thain Backs Auction-Rate Securities,” Wall Street Journal, May 8, 2008.
“as the most vulnerable brokerage after Lehman”: Reinhardt Krause, “Lehman Bros. Extends Slide As Wall St. Doubts Future,” Investor’s Business Daily, June 13, 2008.
For a single day John Thain had the job he had wanted for his entire career: Kassenaar and Onaran, “Merrill’s Repairman,” Bloomberg Markets. Craig Horowitz, “The Deal He Made,” New York, July 10, 2005.
At Robert Hurst’s Fifth Avenue apartment: Ellis, The Partnership, 613.
Corzine off skiing in Telluride, Colorado: Ibid.
Thain, longtime lieutenant and friend of Corzine: Ibid. Corzine had long been an ally of Thain’s, helping him secure the chief financial officer job in 1994 and later a spot on the executive committee. They went skiing together in Colorado and dined out with their wives in Manhattan.