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.