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Greed, Hubris, the Fall of Merrill Lynch, and the Near-Collapse of Bank of America
Crown Publishing Group
November 2010
On Sale: November 2, 2010
480 pages
ISBN: 0307717860
EAN: 9780307717863
Hardcover
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Non-Fiction
The intimate, fly-on-the wall tale of the decline and fall
of an America icon
With one notable exception, the firms that make up what we
know as Wall Street have always been part of an inbred,
insular culture that most people only vaguely understand.
The exception was Merrill Lynch, a firm that revolutionized
the stock market by bringing Wall Street to Main Street,
setting up offices in far-flung cities and towns long
ignored by the giants of finance. With its “thundering herd”
of financial advisers, perhaps no other business, whether in
financial services or elsewhere, so epitomized the American
spirit. Merrill Lynch was not only “bullish on America,” it
was a big reason why so many average Americans were able to
grow wealthy by investing in the stock market. Merrill Lynch was an icon. Its sudden decline, collapse, and
sale to Bank of America was a shock. How did it happen? Why
did it happen? And what does this story of greed, hubris,
and incompetence tell us about the culture of Wall Street
that continues to this day even though it came close to
destroying the American economy? A culture in which the CEO
of a firm losing $28 billion pushes hard to be paid a $25
million bonus. A culture in which two Merrill Lynch
executives are guaranteed bonuses of $30 million and $40
million for four months’ work, even while the firm is
struggling to reduce its losses by firing thousands of
employees. Based on unparalleled sources at both Merrill Lynch and Bank
of America, Greg Farrell’s Crash of the Titans is a
Shakespearean saga of three flawed masters of the universe.
E. Stanley O’Neal, whose inspiring rise from the segregated
South to the corner office of Merrill Lynch—where he
engineered a successful turnaround—was undone by his belief
that a smooth-talking salesman could handle one of the most
difficult jobs on Wall Street. Because he enjoyed O’Neal’s
support, this executive was allowed to build up an
astonishing $30 billion position in CDOs on the firm’s
balance sheet, at a time when all other Wall Street firms
were desperately trying to exit the business. After O’Neal
comes John Thain, the cerebral, MIT-educated technocrat
whose rescue of the New York Stock Exchange earned him the
nickname “Super Thain.” He was hired to save Merrill Lynch
in late 2007, but his belief that the markets would rebound
led him to underestimate the depth of Merrill’s problems.
Finally, we meet Bank of America CEO Ken Lewis, a street
fighter raised barely above the poverty line in rural
Georgia, whose “my way or the highway” management style
suffers fools more easily than potential rivals, and who
made a $50 billion commitment over a September weekend to
buy a business he really didn’t understand, thus
jeopardizing his own institution. The merger itself turns out to be a bizarre combination of
cultures that blend like oil and water, where slick Wall
Street bankers suddenly find themselves reporting to a cast
of characters straight out of the Beverly Hillbillies.
BofA’s inbred culture, which perceived New York banks its
enemies, was based on loyalty and a good-ol’-boy network in
which competence played second fiddle to blind obedience. Crash of the Titans is a financial thriller that puts you in
the theater as the historic events of the financial crisis
unfold and people responsible for billion of dollars of
other people’s money gamble recklessly to enhance their
power and their paychecks or to save their own skins. Its
wealth of never-before-revealed information and focus on two
icons of corporate America make it the book that puts
together all the pieces of the Wall Street disaster.
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