The Blame’s on Thain

"What? I'm not tense."
"What? I'm not tense." Photo: Getty Images

"First of all, I take exception to the 'you guys' comment. I did not create these CDOs," Merrill Lynch CEO John Thain told the analysts heaping blame on him in yesterday's conference call, after the firm announced a startling $9 billion write-down and $4.95-per-share loss for the second quarter. "These are legacy positions." But protest as he might that the blame lies with predecessor Stan O'Neal, the mob is growing louder. They are coming for him. They are beating their drums and chanting and growing wild from the smell of blood in the air!

"It is quite a comedown for Mr. Thain, 53, who won praise for revitalizing the embattled New York Stock Exchange before taking the top job at Merrill," notes Louise Story in a sympathetic story in the Times.

The Wall Street Journal's "Breaking Views" column is not so forgiving, saying of Thain, "He no longer deserves a free pass for everything stemming from that disaster," and adding that "his performance has been mixed."

Portfolio notes that Merrill's "ugly quarter" comes in part from his own missteps, and Fierce Finance notes that "the bloom is off the rose."

Sad face!

Henry Blodget, on Clusterstock, is a calm voice in the wilds: "The media is trying to hang Thain on the 'I said we had enough capital' petard — the same one that felled Erin Callan at Lehman. Despite the horrific losses, Merrill's in better shape than Lehman, and Thain deserves more time."

But hark! What's that? From 941 Park Avenue, we think we can hear something. Could it be — cackling?

Stan O'Neal, Are You Listening? [DealBook/NYT]
Heated Exchange [NYP]