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December 2, 2008 8:52:29 PM CST

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Thain Made Most of Merrill's Ugly Position

Posted Sep 16, 08 2:34 PM CDT in Opinion,  Business 

(Newser) – As the credit market self-destructed, Merrill Lynch and Lehman Brothers faced similar problems. The difference, Henry Blodget writes in Slate, is that Merrill’s John Thain played his cards right, and Lehman’s Dick Fuld didn’t. Brought in to clean house after Stan O’Neal’s high-risk strategy exploded, Thain immediately cleaned up the balance sheet. Making the best of bad options netted shareholders $50 billion.

Fuld tried similar strategies, “but always a step behind,” Blodget says. Where Thain was cleaning up someone else’s mess, it was Fuld who’d put Lehman in peril, and perhaps was reluctant to admit his mistakes. When both firms seemed ready to die, it was Thain again who acted faster, securing the deal that fixed Merrill’s problems, permanently.

Source Slate

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Merrill Lynch Chairman and CEO John Thain, left, and Bank of America Chairman and CEO Ken Lewis shake hands following a news conference in New York yesterday.   (AP Photo)
John Thain took over as Merrill Lynch CEO in November, and though the brokerage is worth much less, he did manage to avoid bankruptcy a la Lehman Brothers.   (AP Photo)
Like John Thain at Merrill, Lehman Bros. "CEO Dick Fuld was dealing with the same problems and implementing the same solutions%u2014but always a step behind," Henry Blodget writes.   (AP Photo)
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The events of last weekend will forever be seared in Wall Street history. - Henry Blodget

Thain had been dealt a tough hand, but, unlike his compatriots at Bear, Lehman, Fannie, Freddie, and other firms, he played it well. - Henry Blodget

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