Poor John Thain lost his job today. I blogged about him before, but I didn't know how correct my sentiment was when I said that Merrill's CEO John Thain deserved a one-way ticket to a lake of fire. Q4 numbers have just been released for Merrill Lynch, and it turns out they lost $15.31 billion. Billion. Billion. Billion. Say that fifteen billion times and you will start to get a feel for how painful it is. Of course, lots of people at Merrill still got their year-end BONUSES last year for LOSING $15.31 billion. It turns out Thain's office also got a $1.22 million facelift when he became Merrill's CEO. ($1405 for a wastebasket!?!?) I'm sorry, but that borders on sociopathic behavior. With the median price of a home in America hovering at around $250,000 (and plunging), no one in his right mind should renovate his office at a cost of $1.22 MILLION. If this is how we're going to spend taxpayer money, why not just pay off people's individual mortgages?Bye bye John Thain. The bad news is you're probably going to hell. The good news is you're not going to be lonely there.
4 comments:
The saddest bit of this downfall is that we probably would not know the "details" had they not been "leaked" to the press as BofA tries to salvage Kenneth Lewis' reputation.
Now that Thain is gone, Lewis should go next because in his acquisition spree he jumped the gun and saddled BofA with Countrywide (like one could salvage their mortgage portfolio) and Merrill (even if the government told him to close the transaction vs. backing out or else there'd be dire consequences to the US financial system if the acquisition failed to close).
Those poor choices have also cost us dearly as there might be the need to "nationalize" BofA (will it be National Bank of America?).
In any event, if Thain had failed to unload the piece of crap balance sheet he inherited at Merrill to BofA the government would have been stuck with the carp outright.
Now ... try to figure out if at least some of the Merrill senior executives can be forced to pay back that last bonus via a "clawback" as was the case for UBS in Switzerland.
It's like one poisonous blowfish consuming another blowfish and the American taxpayer is supposed to consume it all as a delicacy.
You are absolutely right about Lewis' poor judgment with Countrywide. I did a lot of work with Countrywide in the past--everyone knew how pathetic that portfolio was.
America's banking and regulatory system is a criminal joke. The incredible thing is that no one is going to be prosecuted for all this loss and devastation. I am just angry and embarrassed over the state of my country.
This new chapter in corporate scandals just proves that it does pay to be recklessly greedy (i.e. the banks which will survive because they were not completely full of toxic crap) and even dishonestly so (say being stupid or having poor business judgment vs. being a fraud).
As long as the executives can claim to be the former (I'd love to be stupid enough to get paid $10 MM plus a year!) there will be no way to prosecute them in court.
At best if the government nationalizes some of these rotten institutions we might see some attempt to force executives to pay back some of their past bonuses which were based on fake profits.
Can someone tell me John Thain Family tree? I really would like to know this guy and his orgin.
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