Tuesday, April 12, 2011

Crash of the Titanic

I finished Greg Farrell's Crash of the Titans with a sense of giddy elation bordering on hysteria. Consider: In all of a long and not terribly corrupt life, I have never yet had--and probably never will have--to submit myself to the malign mercies of employment at Bank of America (but just to be clear, this is the Beverly Hillbilly version we're talkin' about now, not its predecessor California version which might have been at least minimally more fun) .

But the BHBA--if Farrell has it pegged, has there ever been such a combination of highly efficient mediocracy and police state? By all the evidence, Ken Lewis positively disliked and distrusted brains, much preferring to surround himself with drinking buddies. To be fair he did like to buy other banks--but for day to day operations, his weapon of choice was a man who must have been the most efficient enforcer of ideological conformity outside the court of Ranuce-Ernest IV.

Delighted as I am not to have been entangled with this lot, I'll concede that there are a few points in their favor.  One, old-fashioned public utility banking was/is supposed to be dull.  Indeed part of our problem is that so many bankers--in the end, including Lewis--found that the serpent beguiled them with the lure of the big apple (and how's that workin' out for ya, Mr. almost-capsized-the-bank?).  Correspondingly, dull banking doesn't pay very well.  And one point where you almost forgive Lewis his passion for mediocrity is that he had just as much contempt for Wall Street pay packets as, well, as everyone who does not earn a Wall Street pay packet.

Finally, if Lewis' Charlotte sounds like hell with enhancements, I can't begin to think of what it must have been to work for the titans at Merrill--Merrill, whose decline and fall provides the unifying thread of the narrative.  We start with the notorious Stan O'Neal, and if ever anybody needed a better press agent it is O'Neal, who seem to have garnered (if not quite "earned")  a place as the most unloveable spoiled  brat in the whole petulant play yard.  And it may be--it does seem to have been--O'Neal's mismanagement that led to the semi-collapse of Merrill.  But one tends to forget that O'Neal left just about a year before the ultimate sale to B of A; it was John  Thain who stood at attention on the bridge while the salt waves lapped over his boot-tops.  And what exactly is one to make of Thain?  It's a bit harder to say.  He certainly never lifted a pinky to be liked; so also it never seems to have occurred to him that there was anything much worth saving at Merrill except his own mega-bonus, and perhaps the interests of the small cabal of insiders he brought over from Goldman Sachs, evidently to tell him what to do,  By contrast, with people whose help he might well have used at Merrill, he seems content to be dismissive or downright rude.

But he did have a certain lordly style; at least he seems to have shown good taste in office furnishings, though it might have been nothing more than a ploy to distract attention from his own vacuous Clark Kent smile.    I grant that of all the supremos in this gripping account of the Merrill debacle, he seems the least offensive.  But one thing you learn from this highly readable narrative is that it's not just lonely at the top: it's also mean-spirited and often downright unpleasant. Makes a fella happy he's quietly tucked away in Palookaville.  


Ken Houghton said...

I at one time or another worked for both BofAs. The current BofAINO is a very different culture.

If Thain had taken over two years before--and brought Tom Montag over with him, as he did--Merrill would have survived. The available learning curve for running the new organization was foreshortened at just the wrong time; think of ML as the opposite of Michael Lewis's The Big Short and the transition makes sense.

Ken Houghton said...

Just out of curiosity: does Farrell go into that the reason NCNB was able to grow so successfully was that there was explicit collusion between the Southern banks that they would only permit takeovers by other Southern banks? (It's mentioned—as a positive—in the BofAINO training film.)

Buce said...

Interesting, I don't recall him making precisely that point, although he does stress the presence of the old Confederacy culture; whether it might better be described as a Flem Snopes culture is a question that would require further thought. He does not the irony of its winding up in the hands of an New England Irish Catholic--who, now that I think of it, might have been more at home in the culture of the old Merrill.