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John Thain's Top Ten Greatest Moments

If there's one corporate honcho who's emerging as the poster boy for all the varied Wall Street sins that the financial crisis has exposed -- not just greed, but callousness, obliviousness and general incompetence -- its Merrill Lynch's former CEO John Thain.

Over the last few days, the revelations about Thain's mismanagement of Merrill have been coming thick and fast -- culminating with his ouster yesterday as an executive at Bank of America, which bought Merrill at the height of the financial crisis last September.

Thain, a top John McCain backer who was tipped as a candidate for a White House post had the Arizona senator won the presidency -- has amassed quite a record in his short time at Merrill. Lavish personal spending, absentee leadership, bonuses for billions in losses -- it's almost been too much to keep track of.

So we've created a handy rundown of Thain's top 10 greatest moments over the last turbulent year. (You might also want to check out our Merrill Lynch timeline to brush up on how Thain's missteps fit in with the larger story of his firm's collapse.)

In rough chronological order, here are John Thain's top 10 greatest moments:


1. The Great Redecoration

Thain pays $1.2 million last year -- well after Merrill's huge losses on mortgage assets are known -- to refurbish his office suite. That includes $800,000 to interior designer Michael S. Smith, who's also redecorating the White House for the Obama family. (More Smith clients: Steven Spielberg, Michelle Pfieffer, and Cindy Crawford.)

Other expenses from the big redecorating project, all signed off on by Thain personally:

Area Rug: $87,784
Mahogany Pedestal Table: $25,713
19th Century Credenza: $68,179
Pendant Light Furniture: $19,751
4 Pairs of Curtains: $28,091
Pair of Guest Chairs: $87,784
George IV Chair: $18,468
6 Wall Sconces: $2,741
Parchment Waste Can: $1,405
Roman Shade Fabric: $10,967
Roman Shades: $7,315
Coffee Table: $5,852
Commode on Legs: $35,115

At this time, reports CNBC's Charlie Gasparino on The Daily Beast, Thain is "preaching the virtues of cost control, telling employees to reduce expenses including car services, entertainment and travel".


2. The Unfortunate Chair Incident

During a summer 2008 meeting with his top financial officer, Thain, angry about Merrill's huge mortgage-asset-related losses, hurls a chair against the wall, shattering a nearby glass panel.


3. Just Can't Quit Those Mortgage Assets

Even after Thain has been forced to beg Bank of America to save his desperate firm, his traders, thinking the market has "bottomed out", keep trading risky mortgage securities. Those, of course, are the very assets that had helped bring on the massive losses, mostly incurred before Thain's tenure, that made the Bank of America deal necessary.


4. The Bonus Fiasco

In October, Thain suggests he should receive a $30-$40 million bonus. By December, he compromises: $10 million. After a blizzard of public criticism, including from New York Attorney General Andrew Cuomo and Senate Majority Leader Harry Reid, he drops his request for any bonus. Later, he denies having asked for one at all.


5. The In-Retrospect-Ill-Advised Ski Trip

In mid December, Bank of America CEO Kenneth Lewis learns that Merrill's fourth quarter losses will be much larger than expected. Lewis gets the bad news not from Thain himself, but from the transition team handling the merger -- perhaps because, after the losses surface, Thain takes off for his ski house in Vail. (A "person familiar with the matter" tells the Journal, hilariously, that Thain was "working and available" while in Vail.)


6. The Failure To Impress The New Boss

Asked by Lewis about the new losses, which will officially come to $15.3 billion, Thain "didn't really have a good grasp of what was going on,", one source tells the Wall Street Journal. Ultimately, the federal government will in January give Bank of American $20 billion -- on top of the bailout funds it had already gotten -- to help it absorb the Merrill losses.


7. The Troubling Lack Of Candor

Under Thain, Merrill appears not have been as forthcoming as it might have been with its new owner about the state of its books. A Bank of America spokesman tells the Journal today: "Their fourth quarter was way beyond anything they said would happen." Even worse, Thain may also have been less than straight with Merrill itself. He doesn't fully inform his own board that, thanks to Merrill's losses, the federal government might need to step in to ensure the B of A deal goes through, according to complaints from board members.


8. The Other Bonus Fiasco

Merrill, with Thain still in charge, accelerates its yearly bonus payments, doling out an estimated $3-4 billion in bonuses before January 1, 2009, when Bank of America will take control. Some at B of A believe the expedited schedule is designed to avoid giving B of A a chance to cut those payments. New York AG Cuomo is now reportedly investigating.


9. The In-Retrospect-Ill-Advised Planned Trip to Davos

Thain plans a trip to Davos to attend the World Economic Forum next week -- even though Bank of America has discouraged the idea.


10. The Final Act

Thain pays $483,320 for 84,600 shares of Bank of America. The following day, he's fired.


Well, at least now he can make it to Davos.


47 Comments

| Leave a comment
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Is the "area rug" for 87K the one that rests on his head?

Mr. Thain, you are fooling nobody, you know?

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WALTER: "This was a valued rug."

DUDE: "Yeah man, it really tied the room together."

;)

John

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Wasn't he the guy that was punched out in the Merrill gym right after the dam broke, by a disgruntled (or fired) employee?

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Well, that was Fuld at Lehman, but they all deserve to be taken behind the woodshed.

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My girlfriend got a ticket for not wearing her seatbelt (but she had it on; they claim they spotted her from a bridge above the road..your tax dollars at...). Let's face it. People like her are the real criminals.

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No, that was Richard Fuld, the former Lehman Brothers CEO.

Though given the list presented here, I posit the wrogn guy got punched.

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I wonder if Mr. Vain is going to have toupe some of that money back?

I've got a million of them.

And yes, please remember toupe your waitress a tip on the way out.

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"Ain't nothin' but a Thain, do what you want to do..."

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Thain, Thain, Thain..... Thain of Fools..

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Any chance we could, maybe, quietly pass a law denying Davos attendees reentry to the country? It would probably do wonders for the economy.

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In case anyone's wondering what a "parchment waste can" is, there's a photo available through the John Norwood Antiques website, norwoodantiques.com, under "new merchandise," at the bottom of the web page.

"1940’s Parchment Waste Can in the manner of Jean-Michel Frank
OBJ-08-1214"

Instantly recognizable as a wastebasket.

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Fro heavens sake, the damn Parchment waste can is...not kidding...MADE IN FRANCE! An American made one not good enough?

French fries were bad enough, now the taxpayer is funding fancy French waste baskets for filthy rich financiers who are robbing the US Treasury!

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But... we must generously compensate such remarkable individuals or they won't take the critical positions of power in our free market economy and the USA will turn into a socialist country like Germany, Japan, or G-d forbid Canada!

I am sure with a mind like his Thain will be scooped up by a great institution like the American Enterprise Institute or the CATO foundation.

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Or, NobleCD, join that honorable (not)news source, Faux Mews.
A serious question: why are these characters not having to repay what they've stolen. I think of myself as an honorable person but I don't know how honorable I'd stay if I was sent into a bank and told to take anything I could over a pretty much unlimited time period.

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Listen the thing that is revolting is that he is not alone with his attitude and viewpoint how the world is designed for their benefit---to an extravagance end. It is no different than the attitude that royal families had in 18th and 19th Centuries where some literally lost their heads and others were revolted against.

I know I was an senior executive search professional in the private equity and investment bank market until it began to seek safe harbor in late 2006.

This is a generation that never "earned" it like the famous EF Hutton slogan, they merely mined their incomes on the backs of other people's money.

I am glad Cuomo did not get picked in the Senate so he can get an urgency of now going after the WS Banks.

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I am waiting to see if Obama turns Eric Holder loose on some of these guys. Holder was the lead DOJ attorney who sent the most powerful Congressman in the House at the time, Dan Rostenkowski (D-Ill-Chairman Ways and Means) link to jail in 1994 for far less padding of the books than Thain.

I am not holding my breath for any legal action aimed at executive malfeasance on Wall Street however.

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Too bad about his bonus, man. That's $10 million that isn't going to get to trickle down to the rest of us.

You take a wad like that and go on a spree at Walmart and they'll have to hire a few more baggers, who then get to buy groceries. Before you know it this economy is moving again.

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These malefactors of great wealth, like Mr. Thain,deserve the boot... rather the shoe. A season in hell, I wish them.

They rob everyone blind, and turn to their friend, the government, for more.

A plague on both their houses.

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Strip them of their money, their citizenship, their passports and deport them to the Caymans or some other tax haven. Let them earn a living mopping the floors of the mail drop banks where they used to stash their ill gotten gains tax free for the rest of their lives.

Kind of sound likes one of those gotterdammerung episodes of the Twilight Zone doesn't it?

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markg8 - You forgot: seize and sell their home/condos, cars, clothing (yes clothing) and personal possessions for auction.

This was actually done in the 1930's to those convicted of fraud who had robbed the public.

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This guy should have absolutely nothing when he gets out of jail.

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Oh yeah that goes without saying. Strip them of everything and let them earn a living with felony convictions on their resume in foreign lands.

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The research is pretty unequivocal that in order to get to a position like Thain's, being a sociopath is an advantage. That would explain his behavior, or more correctly, his misbehavior and why he is so oblivious to the consequences of it. He honestly believes that he is the only one who counts in this world.

This has implications for a suggestion on huffingtonpost that we bring back the stocks, the wooden kind with head holes and armholes. It wouldn't work with these guys because they have absolutely no sense of shame. They believe that the world exists solely for their benefit and spending a week with people throwing month old eggs at them would just make them feel as if they were being picked on. Tumbrils and all their accoutrements are the only thing that these people would understand.

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Agree : bring back the stocks for some of these people.

Passersby would be able to mock and fleer; he would be pelted by little mud balls ( or dung balls according to taste ); his crimes would be listed in front of the stocks.

Of course the whole episode would make network TV, multiplying the humiliation.

This punishment would be effective in preventing the rehabilitation of the malefactor.

Eight years from now he may yet be proposed as Fed Chairman or Treasury boss ... whereas after a time in stocks he would never be appointed to anything.

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Does anybody have an exact date as to when Thain remodeled his office?

In related news, CNBC actually does something relevant and funny: John Thain’s Decorating Spree slide show shows how one big piggy could have saved tens of thousands on his remodel.

-AF
Andrew Sullivan Is A Fraud

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Thain was a candidate for McCain's Treasury Secretary...what a disaster that would have been...he gave lots of money to McCain also...(see newsmeat.com):

"Treasury secretary: FedEx founder Fred Smith; former eBay CEO Meg Whitman; Bain Capital co-founder and former Massachusetts Gov. Mitt Romney; John Thain, former Merrill Lynch CEO and now president of Global Banking, Securities and Wealth Management at Bank of America"


http://www.politico.com/news/stories/1008/15146.html

Boy! did we dodge that bullet!

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It's the eyes. How close they are together that tells the whole story. Sad, but true, I'm afraid. How in Hell did he get as far as he did without greasing something?

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The pathology of these CEOs boggles the minds of little people like me.

Thain seems like more of a crook than a jerk. If the SEC weren't asleep at the wheel, they might have caught Thain in any number of illegal acts.

It is just STUNNING that this is the kind of person John McCain wanted to put at the helm of our economy. Thain is the best reason never to vote for a Republican -- Republicans don't just abide fat-cat crooks/campaign donors, they LIKE them!

The Constant Weader at www.RealityChex.com

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Are we talking Davos Philippines? I've been to the PI many times and it astonishes me how child (boys and girls) prostitution could be so rampant and it the open. If a backpacker who doesn't speak the language and has no family contacts can see this stuff going on than I can guarantee you that the CIA, FBI, State Department, the PI police, PI military, Catholic Church, PI Bishop and President Arroyo (Bush's best friend in Asia) also know it's going on. I wonder why Thain would visit such a city?

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Nobody is talking about the Phillipines. Davos refers to the location of the World Economic Forum. I recommend googling "davos".

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Switzerland. Thain likes his white powder.

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Are there no prisons?! No workhouses?!

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Thain, and others like him, have been looting our corporations for years now. And for the past eight years, that kind of mindset has been minding our government: looting the treasury. The last big heist was Paulson handing out hundreds of billions of dollars to his cronies on Wall Street.
The country has mostly been oblivious to the largest theft in history.
All these people belong in jail; but even Maddof gets only house-arrest, so that he can hide some of his ill-gotten loot.

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Ok. Have we had enough of rich white guys running the world into the goddamned ground? Can they just go away now? Can we be soooo done with them now? Yes? Please?

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If you want to see what a $1.2MM bathroom looks like, I think I've got the picture on www.RealityChex.com -- you'll be underwhelmed.

The Constant Weader

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Show me the money.

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Could it really be that both the "Area Rug" and the
"Pair of Guest Chairs" came to the exact same dollar amount ($87,784)?

These are the numbers I've seen else where, but I find it weird that they are the same -- to the dollar. It's either a mistake or funny business.

And heck, for the same amount you could have your guests sit in the seats of a loaded 2009 Mercedes S-class.

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Ah...but it's no Maybach 62. So, clearly, he was under-decorating.

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You're doing the in-depth accounting that Merrill needed! Now stop looking so closely at the numbers.

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The sad part about all of this excess? It doesn't even appraoch the reward that Stan Oneal received for destroying Merrill Lynch in the first place.

Stan got over $160 MILLION when he left.

36K for a toilet and 1.2M for an office over haul while MER is laying off clerks and admins is completely out of touch and off the chart, but Thain is a rank amateur compared to Stan Oneal.

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Maybe we need to celebrate Bastille Day in the U.S.

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Hey, easy on the man. He did something most thought IMPOSSIBLE!.
He made Stan O'Neal look good

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Oink Oink Oink.

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Call me ignorant and/or naive, but can anyone explain to me whether it is possible--legally-- to recover the bonuses paid with taxpayer's money through emergency IRS provisions that tax it at 100%. Just wondering...

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I meant, of course, "that tax *them* at 100%." I'm just addled by all this. I mean, two to three BILLION dollars could be used to put thousands of people back to work on projects of economic subtance.

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Yup, eyes too close together, just like Blago & Bush. Personally, I think they can't process dimensional image information and hence they assume that the world has just one viewpoint: theirs.

All humor aside, we need to make an example of at least a few of these thieves, and Thain is ideal. Hang him by his heels at the nearest Esso gas station. No one will miss him.

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I don't understand why Thain is not being busted for fraud-- his decorator was also doing two of his houses and it seems obvious that the $800k in decorating fees must have covered Thain's personal decorating expenses. Even the most expensive decorator wouldn't charge $800k to purchase $400k worth of stuff. So Thain not only showed terrible judgement and arrogance, he is also a thief.

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