One thing we’ve noticed recently is that the chorus of dissenting voices inside of Merrill Lynch has quieted in recent months. In the weeks after John Thain replaced Stan O’Neal as chief of Merrill, the securities firm was bitterly riven as executives scrambled for authority (and, of course, money…always money) under the new regime. But by all accounts Merrill is a quieter, happier place these days.
This is a testament to the effectiveness of Thain’s leadership. But we wanted to know: how did he do it? After the jump, we explain why we think something Thain said on Wednesday indicates what happened.
John Thain
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Fed
Is Merrill’s John Thain Worried The Fed’s Investment Banking Window Will Be Closed In September?
By John CarneyAt a gathering of Wall Street dealmakers yesterday Merrill Lynch chief executive John Thain said he hopes the Federal Reserve will continue to permit securities firms to borrow from a new Fed facility launched amidst the implosion of Bear Stearns. We couldn’t help but notice, however, that Thain seemed a bit worried that the Fed isn’t going to keep the window open. To paraphrase a popular saying on Wall Street, “hoping” the Fed window stays open is not a strategy.
“I think it should stay available to the banks and investment banks — the primary dealers. It’s important that it does stay available,” Thain said to the audience at the Wall Street Journal dealmakers conference at the posh Pierre Hotel in Manhattan.
It had been widely assumed that the facility would be continued after its scheduled expiration in September. But recently opinions have shifted, with some reading the recent warnings from several Fed officials as indicating the window will be closed. What’s more, the investment banking community is said to be split on whether they should have continued access to the window. Goldman Sachs is said to be leaning toward opposing a move to make the borrowing facility permanent, and Lehman is said to support the move. Morgan Stanley reportedly takes a middle position, wanting to wait to see the kind of regulation that would accompany the window.
This is the first time we know of that a securities firm has gone on record with its support of keeping the window open. Thain’s decision to take this stance seems to indicate that he is taking seriously the idea that the Fed will not keep the facility open beyond September.
Merrill’s Thain Urges Fed To Extend Lending Deadline To Brokers [Dow Jones]
Merrill CEO wants ongoing Fed access, rules reform [Reuters]
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John Thain
John Thain Is Going To Break The Unitard Out Of Archives And Kick Some Ass
By Bess Levin
Merrill Lynch CEO and amateur beekeeper John Thain’s daughter, Victoria, was robbed last Friday. The thieves apparently entered the Duke junior’s apartment via bedroom window, stole $9,000 worth of stuff including her wallet, camera, and TV, and exited through the front door. Run of the mill burglary or a strategic hit from one of the many enemies daddy’s racked up over the years? The fact that nothing was taken from any of Victoria’s roommates seems to imply the latter. Suspects include: Jon Corzine, Stan O’Neal, bears and vegans, which is to say—Dan Loeb. Either way, she should thank her lucky stars that the phantom defecator couldn’t get the funds together for a trip down South.
Earlier: Presented Without Comment
Thief lifts goods from student’s apartment [The Chronicle]
“Thain is also a beekeeper, and used to keep hives in the backyard of his Rye, New York, estate…In his time as a beekeeper he was only stung once. ‘They don’t sting unless you aggravate them,’ he says.”
Everything about this is so wrong we almost feel guilty just linking to it. Almost.
“I am getting tired, really getting tired, of these golfing cocksuckers.” [2:45]
Earlier: Merrill Lynch Has Made A Terrible Mistake
And we’re back to Thain already.
Not that there was any doubt but it’s now official. Here’s the Merrill Lynch press release announcing that Thain takes the helm on December 1st.
“Merrill Lynch & Co., Inc. (NYSE: MER) today announced that John A. Thain, chief executive officer, director and member of Management Committee of NYSE Euronext, Inc. and former president and chief operating officer of Goldman Sachs Group, has been appointed chairman and chief executive officer of Merrill Lynch, effective December 1,” Merrill said in a statement.
Full Press Release after the jump.
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Exchanges
Merrill Lynch Taps Thain
New York Post Reports Announcement Will Come This Afternoon
By John Carney
It looks like it’s Merrill Lynch that is nabbing New York Stock Exchange chief executive John Thain.
The New York Post has just reported that Merrill is expected to announce that it has hired Thain to replace ousted CEO Stan O’Neal sometime this afternoon. Zach Kouwe, whose reporting has scooped the world on this story, attributes it to “people familiar with the matter.”
An NYSE board meeting is scheduled for 2 p.m. today and an announcement could come after the market closes, sources said. The move is a huge coup for Merrill and board member Alberto Cribiore, who has led the search for a new CEO after O’Neal resigned on Oct. 30.
Kouwe also reports that Citi wanted Thain but he chose the smaller, more narrowly focussed Merrill instead. The Post describes this as a “snub” for Citi. NYSE Chief Operating Officer Duncan Niederauer is expected to land the top job at the exchange.
Citi Snub: Thain Going To Merrill [New York Post]
Update 12:32: The Wall Street Journal files its report also: “John Thain, CEO of NYSE Euronext, has agreed to take the top post at brokerage house Merrill Lynch & Co., according to a person familiar with the matter.”
Update 12:39: Congratulations and thanks to all our readers who voted in this morning’s reader poll, which correctly called that John Thain would leave the NYSE for Merrill. We’re constantly gratified by the amazing accuracy of our polls, which have predicted everything from the level of Fed rate cuts to this news. We like to think we have the best informed, most intelligent readers but it’s nice to see you guys prove it over and over again.
Update 12:50: So what happened to Blackrock chief Larry Fink, the man many thought would eventually be Stan O’Neal replacement? Did he turn the job down? Was the board’s enthusiasm for him exaggerated? Some fear of subprime contagion? Loyalty to Blackrock?
Update 1:06: CNBC’s Charlie Gasparino says that Fink was offered the job, but he spooked the Merrill board by demanding a full-accounting of Merrill’s subprime exposure. This led the board to go in another direction, perhaps out of fear that Fink might turn down the job if the subprime exposure was too bad.
Update 2:01: The Journal confirms that the stock exchange will name
Duncan Niederaueras its new CEO.
Would you believe us (Charlie Gasparino) if we (he) told you that John Thain:
- Had a letter addressed to him from floor trader Kevin M. Flanders that said “Thank U [sic] John Thain for ruining all of our careers?”
- Knows he isn’t well-liked by the trading community
- Once ate a panda
- Was accompanied by a security detail on a recent visit to the floor
- Just wants to dance
- Is “openly mocked for his stiffness”
- “Makes Al Gore look animated”
- Is allergic to bees
- Often finds that his attempts at humor fall flat because, “given his rigid demeanor, traders simply can’t tell whether he’s kidding” or not
- Has a 22″ cock
Crunch Time [Trader Monthly]
As most of you probably know, John Thain brushed off the claims of a Goldman analyst today that Reg NMS will “erode the transatlantic stock exchange group’s market share and benefit its main US rival, the Nasdaq.” Tossed them to the wind; knocked them down; scoffed; said, “Whatchu talkin’ about, Willis?” Now, these responses make sense if you’re going to buy the party line that the New York Stock Exchange is, as they say, in compliance with the group of rules known as the Regulation National Market System, and believe the Goldman analyst, Joshua Carter, to be on the right track.
But, as John Francis Carney III has pointed out (like the crazy homeless man who shouts at you when you walk into your building every day) in the past, there’s a good chance that the NYSE isn’t in compliance with Reg NMS. Yes, JFC3 has said, these rules that allegedly help rather than hurt the NYSE—excuse us, NYSE Euronext—are not even being followed by the small elves that push buttons on the corner of Broad and Wall. Or, at the very least, we cannot get any firm confirmation from the NYSE or the SEC that NYSE is in compliance. But why would that be? Why would just John Thain allow this to happen? And why did Erin Burnett show up to the set today walking with a limp? The answers* may surprise you.
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John Thain
(P.S. Nobody Say Anything About The Shanghai Surprise. It Never Happened. What Never Happened? Exactly.)
By Bess Levin
We’re not trying to insinuate that FT’s piece on John Thain sounded like it came from The Desk of John Thain or someone as equally into the old boy as, well, the old boy but if you want to glean that, that’s fine by us. If you’re interested in hearing about how great Mr. Thain is but are also the sort of person who values your time, join us after the jump.
- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker -
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Sponsored Content
SoFi Answers the Call to Refinance Student Loans and Provides Unique Community Benefits
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