Monday, January 28, 2008

What’s $34 Billion on Wall Street? - New York Times

Tails I win, heads I don't lose? That seems to be the main point of the NY Times piece that looks at what has happened to some of the CEOs whose firms have most millions, err billions.

A look in:

What’s $34 Billion on Wall Street? - New York Times
UNDER the stewardship of Dow Kim and Thomas G. Maheras, Merrill Lynch and Citigroup built positions in subprime-related securities that led to $34 billion in write-downs last year. The debacle cost chief executives their jobs and brought two of the world’s premier financial institutions to their knees.

In any other industry, Mr. Kim and Mr. Maheras would be pariahs. But in the looking-glass world of Wall Street, they — and others like them — are hot properties. The two executives are well on their way to reviving their careers, even as global markets shudder at the prospect that Merrill and Citigroup may report further subprime losses in the coming months.
and later the article cites examples from history that show the current trend is not new:
"Perhaps the most notorious example of failure leading to prosperity is John Meriwether. Ousted from Salomon Brothers in 1991 for his role in a bond trading scandal, he became a co-founder of Long Term Capital Management, the hedge fund that nearly collapsed in 1998, rattling markets worldwide. He has since founded a second fund, JWM Partners, with assets of around $3 billion. More recently, Brian Hunter, the energy trader at Amaranth Advisors whose disastrous bets led to the disintegration of that $9 billion hedge fund, is now advising a private equity fund called Peak Ridge on starting a hedge fund.
Notably missing in the article is Bear Stearn's Jimmy Cayne who resigned in large part due to Bear's losses.

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