And we don’t get the details unless they fit the narrative of the moment. For example, it took us by surprise when we found out late in the game that the level-headed engineering grad John Thain lived like the King of Siam, with a Westchester estate big enough to merit five addresses in three towns. That makes his controversial office-furniture purchase more understandable. People, please. If you are going to focus on the personal, at least give us all the gory details, and give them when they matter. We shouldn’t have to scour the tabloids for these.
As for Thain, he is now a full-fledged member of the Rogues Gallery.
Reuters informed us:
Once they were the brightest stars in the investment universe, but Goldman alumni—including Thain, former Treasury Secretary Hank Paulson and former Citigroup Chairman Robert Rubin—look much less brilliant now.
Barron’s also broods over the past, offering us “time-cured aphorisms about bear markets,” including:
‘In a bear market, no eminence of the financial world comes out the other side with his reputation untarnished.’ Alan Greenspan, Henry Paulson, Richard Fuld, even Warren Buffett have either seen their pedestals kicked from beneath them, or at least lowered.We can now add John Thain—Goldman Sachs and NYSE alumnus, the onetime orneriest sheriff come to town at Merrill Lynch—to this list.
Now this raises a question. If this has become a pattern, why can’t the press see it coming? Or, at least, keep in mind from the beginning that it is a very real possibility? Why build up heroes knowing you will likely be bringing them down again? And in the aftermath give us knowing comments like:
With hindsight, it seems obvious that Mr. Thain, who got his MBA at Harvard Business School, wouldn’t last long.
Hah.
And actually, this piece gets it wrong even in hindsight! The culture of B of A and the culture of Merrill just weren’t compatible, goes the logic here. But this clash-of-cultures model misses the point. In very important ways Merrill and B of A were the same. That is the story. Not personality or management-style differences.
One of our least favorite techniques for dealing with fallen heroes is revisionist history. Like when Reuters proclaimed that Thain
was regarded until 14 months ago as one of Wall Street’s steadiest hands.
Fourteen months? More like three or four, at most.
And you get a publication like Forbes trying to cover its tracks. Its April 7, 2008, cover story on Merrill turned out to be way off track—“The credit-markets seizure aside, Merrill is in damn good shape”—and got explained this way in October:
Our cover story on Merrill Lynch said the brokerage giant was doing ‘great’ after its $22 billion writedown for lousy mortgage-backed securities. Not great enough. After rival Lehman Brothers was forced into bankruptcy in September, Chief Executive John Thain agreed to sell Merrill to Bank of America for $29 a share, or $50 billion. That was a 70% premium over the market price of $17 a share but well below the $48 a share the government of Indonesia and Davis Select Advisors paid when they pumped $6.2 billion into Merrill in December. Merrill’s fate wasn’t a total surprise, however. Our story cautioned that Merrill still carried on its balance sheets $90 billion in dicey loans and squirrelly derivatives.
Oh, well, all right then. Excellent ass-covering there, Forbes.
Everyone makes a mistake, you say? Maybe, until one remembers that it was precisely this kind of reflexive business-press boosterism—in which all ties go to Wall Street—that helped land us here.
Thankfully, two excellent stories earlier this month, one from the NYT and one from the WSJ, put Thain’s reputation to rest.
The Journal gave us a nice inside look at negotiations between Merrill and B of A, making clear how active the government’s role was in pressuring Lewis to stick to the deal.

So Bill and Hill run 170 metric tons of cocaine into mena arkansas over a five year period, kill Vincent Foster to cover up their gutting of madison guaranty savings and loan in 1995, and off she goes as Sec'y of State (I would probably be dead now if she had become president). See what's wrong with America?
#1 Posted by Lyle Courtsal, CJR on Fri 20 Feb 2009 at 12:12 AM
This is great stuff. How many Biz magazine covers wasted showing the latest master of the universe posing with his arms folded, blue shirt/white collar, standing to a globe? And at what ultimate cost?
#2 Posted by Steve Daley, CJR on Fri 20 Feb 2009 at 03:38 PM
Good piece. But dolly back a bit farther. There really are villains, with names like Rubin, Dodd, Gramm and--the mad preacher--Greenspan. The Thains of the world, the Paulsons, the Reeds and Weills and Jack Welch's all worshipped the same cult for 25 years before this latest crash. Their supplicants in the business press wrote the same crap stories through at least two previous busts. Hardly any of them ever asked what a "derivative" was.
#3 Posted by ed ericson, CJR on Sun 22 Feb 2009 at 10:41 AM
It seems that things are just the same over here in the UK as they are there, if Joe public was to act this way the would undoubtley be locked away.
Ergonomic office chairs
#4 Posted by Andrew Ferrar, CJR on Sat 25 Apr 2009 at 07:31 AM
An excellent piece that highlights society's obsession with the individual... Time to get up out of the office chair people and face the world we live in.
#5 Posted by H.Mueller, CJR on Fri 9 Sep 2011 at 06:16 AM