Posted: February 6, 2009
When I was in high school, a group of friends got together just about every Friday night to play poker. Each of the players would try to host the game when it was convenient, but we gathered at my friend Bob's house quite a bit. Bob's dad was the local family physician in Antioch,IL. Bob's oldest brother, John, used to occasionally sit in on our $.25 ante and $1 maximum-bet card games. Whenever John left the table (usually with a lot of our coins) we were reminded how smart John was and how he was going to make it big on Wall Street someday.
As years passed, I became more engaged in the business world. I read about how the oldest brother of my high school friend, Bob, became the darling of Wall Street. He worked at Goldman Sachs and was later recruited to resuscitate the New York Stock Exchange after the previous caretaker was accused of reaping millions of dollars in salary and bonuses to the angst of investors. Bob's older brother, John, became "Mr. Fix-It" as he was able to turn around the fortunes of NYSE and merge the operation with Europe's largest stock exchange.
In 2007, my friend Bob's oldest brother was asked to help Merrill Lynch out of its misery. Many of the Merrill Lynch faithful believed that "Mr. Fix-It" would change the course of the financial industry. However, as the world financial crisis blossomed, my friend Bob's brother became involved in one of the worst financial disasters in history. Although John Thain avoided asking for federal tax dollars to bail out Merrill Lynch, he has been questioned about the $15 billion loss in Merrill's fourth quarter that somehow nobody knew about as he was selling out to Bank of America.
I discount media reports of improprieties among famous and/or wealthy individuals because, many times, there is no factual evidence to support the accusations. However, when John Thain was asked to explain his apparent greed during his Merrill Lynch tenure, he was oblivious to what is going on in the real world. As Thain asked for another $10 million bonus on top of his $84 million salary, he also made the executive decision to spend more than $89,000 on an area rug and $35,000 for a toilet for his office suite.
At one time, I was proud to know that one of the most influential people on Wall Street was from my home town area and is my high school friend's oldest brother. But I wish the story would have turned out better for "Mr. Fix-It" because it seems to me that John Thain will soon find out if anyone bothers to accept his ante while he tries to play the game in this new banking environment. My guess is that "Mr. Fix-It" will not be bluffing again anytime soon.