It's not exactly a secret that some of Wall Street's top guys don't get along. Witness Jamie Dimon calling Vikram Pandit "a jerk" on a conference call and Bank of America executives reportedly christening internal CEO candidate Bryan Moynihan "Mumbles." Vanity Fair's excerpt of Andrew Ross Sorkin's Too Big to Fail, the latest book to put into historical perspective the financial crisis that happened like five minutes ago and for all intents and purposes is still going on, reveals some of the collisions that occurred last September when these swollen egos were forced to work together in tiny rooms.
The problems are so rife, there's even a euphemism Wall Streeters use to talk about dealing with people they hate, Sorkin informs us: "social issues." For instance, when considering a proposed merger with Citigroup, Goldman Sachs was hesitant, not just because of the junk clogging Citi's balance sheet but because, Sorkin writes, as COO Gary Cohn quipped at one point, "the social issues would be enormous."
The expression “social issues” was yet more Wall Street code, for who would run the firm. Goldman’s management didn’t exactly have high regard for Pandit and his team.
And they weren't the only ones having social issues. Some of the more colorful arguments from the excerpt:
John Mack versus Jamie Dimon
After several Morgan Stanley executives reported receiving calls from JPMorgan CEO Jamie Dimon, Morgan Stanley CEO John Mack decided to get on the horn to ask him what, exactly, he was fishing around for.
“Let’s get this out in the open: do you want to do a deal?”
“No, I don’t want to do a deal,” Dimon said flatly.
“Well, that’s interesting,” Mack retorted. “You’re calling my C.F.O. and you’re calling my president — why would you do that?”
“I was trying to be helpful,” Dimon repeated.
“If you want to be helpful, then talk to me. I don’t want you calling my guys,” Mack said, hanging up the phone.
Lloyd Blankfein versus Bob Steel
At one point, Robert Steel, former Goldman executive and U.S. deputy secretary of the Treasury, then the CEO of Wachovia, flew to New York to meet with Goldman Sachs management about the possibility of a merger between the commercial bank and the investment bank. Steel was scheduled to land at Westchester County airport, and Goldman Operating Officer Gary Cohn walked into Blankfein’s office and made a suggestion. Per the book, the following conversation ensued:
“Lloyd, you should go pick Steel up at the airport,” Cohn said, believing it would be a gracious gesture to kick off the merger talks.
Blankfein looked seriously annoyed. He felt that he had not gotten along with Steel particularly well ever since Paulson had made them co-heads of Goldman’s equities division years earlier. “Do I have to?”
“Yes,” Cohn said firmly. “I would go with you, but it would be awkward. You should go pick him up.”
Blankfein was still resistant. “Can you go by yourself?”
“No,” said Cohn, who considered Steel a friend. “I already have a very good relationship with him.”
John Mack versus Tim Geithner
Despite being convinced that he was on the brink of securing a deal with Japanese company Mitsubishi for a cash infusion of $9 billion that would keep Morgan Stanley solvent, then–New York Fed president Tim Geithner and then-secretary of the Treasury Hank Paulson had been harassing Mack to find a merger partner. When Geithner repeatedly called as he was closing the deal, Mack finally snapped.
He looked at Ji-Yeun Lee, who was standing in his office helping with the deal, and told her, “Cover your ears.”
“Tell him to get fucked,” Mack said of Geithner. “I’m trying to save my firm.”
Wall Street’s Near-Death Experience [Vanity Fair]