Too Big to Fail [84]
One morning in late June, New York’s mayor, Michael Bloomberg, left his brownstone apartment on Seventy-ninth Street, hopped into the back of his black Suburban, and headed to Midtown for a breakfast date. With his security detail waiting outside, Bloomberg, wearing his usual American flag lapel pin, strolled into New York Luncheonette, a tiny diner on Fiftieth Street across from a parking lot, and greeted John Thain. The restaurant was one of Bloomberg’s favorites; he had recently brought a long-shot presidential hopeful, Barack Obama, there.
Although Bloomberg didn’t know Thain very well personally, he had had a long and fruitful association with Merrill Lynch, which had supported his eponymous financial-data company since its inception. Bloomberg, who had been a partner at Salomon Brothers, the bond-trading powerhouse, and was in charge of the firm’s information systems, started his terminal business in 1981; Merrill, which helped finance it, was the first customer to buy one of his machines, which delivered real-time financial data for traders. In 1985, Merrill acquired 30 percent of Bloomberg LP for $30 million, though it later reduced its stake by a third.
When Michael Bloomberg became mayor of New York, he placed his 68 percent stake of the company into a blind trust and stepped away from managing it—even if, in reality, it was closer to a half-step, especially when it came to critical company matters—like the one John Thain was about to broach. Thain, desperate for more capital and sufficiently convinced after the Larry Fink debacle that he should try to keep the firm’s BlackRock stake, wanted Bloomberg to buy back Merrill’s 20 percent holdings in his company. If the mayor declined to make the purchase, however, it was unclear whether Merrill would have the right to sell its share on the open market. The contract had been written in 1986 and they both knew it was murky.
Tucked away in a corner booth, the two men sipped coffee and chatted amiably. As former bond traders and ski enthusiasts, they hit it off surprisingly well.
“We’d probably be looking to do this over the summer,” Thain said, trying to remain somewhat noncommittal so as not to convey any sense of panic. Within half an hour, they had an agreement to move forward.
It was the lifeline he had been hoping for, and as soon as he bid the mayor farewell, Thain raced back to the office to tell Fleming to start work on the project immediately.
CHAPTER EIGHT
Jamie Dimon’s 10:00 a.m. meeting was running long.
“Tell Bob I’ll be there in a minute,” he told Kathy, his assistant.
Robert “Bob” Willumstad and Dimon both had once been part of Sandy Weill’s team of financial empire builders. At different points in time, each had been considered Weill’s heir apparent at the behemoth Citigroup they had all helped create, though ultimately, neither would be given a chance to assume its leadership. The two had remained close in the decade since Dimon had been forced out.
A tall, white-haired executive who could have been the archetype of the Manhattan banker, Willumstad sat patiently on this early June day in the waiting room on the eighth floor of JP Morgan in the old Union Carbide offices. A glass cabinet displayed replicas of two wood-handled pistols with a resonant history: They had been used by Aaron Burr and Alexander Hamilton in the 1804 duel that killed Hamilton,