All Articles Finance Modern Money While You Were Working - March 30

While You Were Working – March 30

John Thain is baaaaaaaack, PIMCO on risk-retention rules, the family that is trying to give back $8 billion, and go Ramblers!

3 min read

Modern Money

John Thain

John Thain resurfaces just in time to peer over another CEO's shoulder. (Getty Images News)

Programming note: WYWW is off Monday to host PGW 2.0. Will be back in action Tuesday.

He’s baaaaaaaaack!

It looks like Deutsche Bank is going to tap John Thain, the former boss of Merrill Lynch and CIT, to join its supervisory board. The timing is uncomfortable considering the news all this week about turmoil atop the German lender, but Thain’s past (and present) also make the choice very fascinating.

Consider this: A full decade after the crisis, opinions are still split as to whether Thain’s decision to sell Merrill Lynch to Bank of America at the height of the turmoil was a panic move that fetched far too low a price or a wickedly shrewd move that kept the Thundering Herd afloat while passing all its hidden losses onto Ken Lewis’ lap. Me thinks it was the latter.

After departing the combined BAML amid much acrimony, Thain landed at CIT Group, where he proceeded to transform the lender. By most accounts, CIT was in a much better place when Thain retired in 2016 than it was when he arrived.

That would seem like a nice rebound for Thain, but then he joined the board of Uber last year at the beckoning of Travis Kalanick. And when you are doing anything at the beckoning of Travis Kalanick, that is gonna cause most people to question your judgement.

And yet, now Thain sits poised to join Deutsche Bank at a time when it is looking for a leader. It is looking for someone who can help it steer though internal and external challenges. Thain has always been a climber (he once reportedly bragged that he was inline to succeed Lewis atop BAML). I don’t think Thain will be the next CEO of Deutsche Bank; but that’s not the same as saying he will never be the CEO of Deutsche Bank.

Speaking of the next CEO of Deutsche Bank

Spiegel is reporting the Deutsche Bank Chairman Paul Achleitner might have his sights set on former UBS wealth management exec Juerg Zeltner.

What risk-retention rules?

PIMCO published this great Q&A about the impact a court ruling that bars risk-retention rules on collateralized loan obligations will have on the market.

$8 billion is a lot of money

I wrote yesterday about how I barely notice a bank fine these days unless it is somewhere around $5 billion. Well, this story definitely caught my attention.

JPMorgan lost a court case that centered on how it managed the estate of a former American Airlines executive, who died with around $20 million in assets, but no will.

Somehow, the case went so wrong for JPMorgan that the jury ended up awarding the widow and other family members a total of $8 billion! The amount is so ridiculous that even the plaintiffs are asking the court to reduce it to a total of $70 million.  

You would think such a gesture would make JPMorgan happy, but alas, Jamie Dimon’s crew is going to keep fighting and seek to reverse the entire judgement. Talk about not knowing how to quit when you are ahead!

WYWW Appetizers

  • The FT lauds NEX boss Michael Spencer.
  • Go Loyola … Keep on Rambling!