Many questions accompany John Thain’s appointment
as CEO of Merrill Lynch. Here are just some of them:
Will Thain be chairman, too?
Almost certainly, yes.
Whither BlackRock’s Larry Fink, now he’s been passed over for the job
as Merrill CEO?
The status quo ante will probably hold for the time being. Fink
feels "sandbagged" by Merrill, which owns 49% of his company. So if
he’s offered a job by, say, Citigroup, he’ll take it. But his unvested stock
and options tie him closely to BlackRock, where he is right now.
Whither NYSE, now Thain’s left?
Thain has left it in good hands – specifically those of Duncan Niederauer
– and in good shape. Niederauer might be a less agressive dealmaker than
Thain, which is not necessarily a bad thing.
Whither Merrill’s brokerage force, now Thain’s in charge?
Thain proved at the NYSE that he has little time for anachronistic
vestiges of the finance world of old, like floor traders. But Merrill’s
brokers are still profitable and powerful, so he’s unlikely to needlessly annoy
them, in the way that Stan O’Neal did. At Goldman, he was reassuringly known
as "Thain the humane".
Can Thain fix Merrill’s mortgage mess?
If anyone can, Thain can. He fixed a nasty mess at the NYSE in the wake of Dick
Grasso’s defenestration, and he knows from mortgages: he ran them at Goldman.
Will Thain sell Merrill?
It’s a decided possibility. Thain proved at the NYSE that he’s
a fan of both dealmaking and internationalization; Merrill is still one of the
most US-centric of the big investment banks. A sale to, or merger with, a European
bank cannot be ruled out.
Who’s the front-runner for the Citi job, now Thain’s out of the running?
It’s wide open. DealBook has
some names, none of which are entirely convincing; Robert Willumstad would
probably be the odds-on favorite if it wasn’t for his present positions at AIG
and his own private-equity shop. I have some rather more unlikely
myself, of course.