John Thain Called Out by the President

We're not sure how John Thain is feeling about being called out by the President this morning. For some background, most readers are aware of yesterday's report from CNBC's Charlie Gasparino on how Mr. Thain spent $1.2 million to renovate his office at Merrill Lynch last year. This came during a time when the firm was already on the skids and laying off employees. It appears as though President Obama saw the story too, because in comments this morning, he basically said that it is unacceptable for companies receiving government aid to be renovating 'offices and bathrooms.' President Obama must be even more surprised with the fact that he paid the same designer eight times less for his work on the White House ($100K) than Thain paid him to do his office ($837K). Since when does the government get better deals than the private sector?

John Thain could be thinking he must be pretty important if even the President of the United States is talking about him. But most likely, Mr. Thain is shaking in his boots. When the President of the United States calls out your actions as a symbol of greed and what's wrong with Wall Street, you may want to think twice about taking the Bentley when you go out 'antiquing' this weekend.

Who would have thought that Merrill Lynch would already have an ex-CEO that is less popular than Stan O'Neal? Somewhere out there, Mr. O'Neal is saying, "Thank God for John Thain!"

Comments

[investor88:]

Thain was initially seen as a symbol of restraint and common sense but it takes trying times to show a man's true colour. Fair to say you now see his true color?

Jan 23 07:31 PM

[morph366:]

The ultimate in toilet humor - how much did John Thain spend (but taxpayers pay for) his commode.

Jan 24 08:10 AM

[DaveW:]

When are we going to start seeing these nimwits in court? Perhaps their crimes are not legally defined as fraud but their actions are legally defined as shareholder deception; and isn't there an ethics violation in there somewhere? May Obama liquidate all of their assets. A year from now I want to see Thain mowing lawns for an honest living.

Jan 24 10:37 AM

[M-P:]

Basically, Thain is emblematic of the rotten corpse. He at first asked for his $10m bonus - didn't see any issue with it - and then backed down given the public outcry. He then pays out bonuses early so he can get in under the BAC wire. I have no issue with paying for performance, but basically, ML, C, and others should, by all intents and purposes, be bankrupt. They gambled on some risky bets and lost. See long term capital management for another example. If you start perverting the risk-reward curve (more risk = potentially more return), then you might as well stop trying to predict, because the relationship breaks down.

Jan 24 11:37 AM

[martyg:]

the poster child for financial chicanery is madoff but he has lots of company. the thain's et al should be facing criminal charges. just like the investors with madoff will face paying back their previous gains. the hierarchy of the banks should have their assets stripped and taken away. they are as ill gotten, as madoffs', without the same public criminal exposure, at least until now.

Jan 24 12:19 PM

[bill d:]

Well I guess if you are going to take your company down the drain - it might as well be in a nice toilet.

*******President Obama must be even more surprised with the fact that he paid the same designer eight times less for his work on the White House ($100K) than Thain paid him to do his office ($837K)*******

Something doesn't smell right here either (pun intended). Is this a Chicago style deal (again ???). I assume Bush didn't strip the building like the Clintons did.

Diogenes (sp?) has left the building.

Jan 24 01:23 PM

[HBWOW:]

Obama spend $350M for election, $15M for inauguration, and now $100K
for his and Mrs. personal touches to the White House. How does all this compare with the free wheeling bailout monies by the goverment - for now merely a drop in the bucket.

Jan 24 01:57 PM

[gwinner:]

If this is the way wire line brokers managed their own houses, why would anyone want them to manage their money. I'm looking for E*Trade, Schwabb and TD Ameritrade to benefit in two ways: 1) More investors are taking control of their own portfolios, 2) Brokers with trust relationships are leaving the wire lines to form their own boutique firms that use the discount trading platforms to execute trades for their customers.

High publicity stories of abuse like this by a wire line CEO can only accelerate this process.

Jan 24 01:57 PM

[HBWOW:]

Where is the line drawn for the bankers/brokers/govern... officials like Barney Frank between authority and fraud???????? Most of what I see is a mix of greed, fraud, collusion, cover up, sweep under the carpet, forgIve and forget, too big and powerful to challenge type WHITE COLLAR CRIMES by ineffective egotists

Jan 24 02:05 PM

[Kunst:]

Why do banking (or any other) executives get bonuses when their company loses money? No profit, no bonuses, top to bottom.

Jan 24 07:06 PM

[HChang:]

Just like the 3 persons who manipulated milk powder in China who were sentenced to death, America needs to impose harsh laws to punish such behaviour and greed, then America will be a safer place for invesotrs and the public. It may not be 100% foolproof but it will discouraged most of the crooks who will think twice before they act. America is still a great country of opportunities for those who chose to prosper in a moral way. From an Asian reader...

Jan 25 03:18 AM

[WMBANZAI7:]

Banker Conversations
(WilliamBanzai7)

KEN: Nice carpet John, should I take of my shoes?

JOHN: Use the slippers by the door.

KEN: I hear their selling Bernie's fleet. Some nice hardware there.

JOHN: The guy is a seedy low life crook, he belongs behind bars.

KEN: Come on John, don't be so hard on the man. He's like all of us in a sense.

JOHN: Have a seat KEN (Pointing to COMMODE ON LEGS)

KEN: Man this place make my digs look like a Japanese bankers office.

JOHN: (Sitting in George the IV Chair) Dozo Ken-san. Every Wall Street Shogun has his castle.

KEN: So you got your bonus after all?

JOHN: How so?

KEN: You gave it to all your friends down the hall and spent the pre-installment on this fancy french hardware.

JOHN: You like that eh? It's what we in the business call an AIG omelet.

KEN: You know John, I think I am going to go over and have a look at Bernie's fleet.

JOHN: Shall I join you. You know China Fun is just down the block from his place.

KEN: No John, you stay here and pack this stuff up while I'm gone.

JOHN: Pack?

KEN: Yes, pack. I want you on the street by 5 PM.

JOHN: I don't even have any shrink wrap!

KEN: The only shrink wrap you need is Dr. Schadenfreude rapping the "Bailout shuffle"

JOHN: See you in bailout hell Ken.

KEN: We are already there John. We are already there.

[One hour later]

BERNIE: Ken, you have my sympathy. People just don't appreciate the Ponzi business model in all its subtle manifestations.
Don't feel taken.

KEN: Skip the sermon Bernie, I'll take em all.

Jan 25 05:36 AM