As is indicated by the subtitle, no one really comes off well in Crash of the Titans: Greed, Hubris, The Fall of Merrill Lynch and the Near-Collapse of Bank of America, the latest financial-crisis snuff book from FT reporter Greg Farrell.
From the CEOs to the administrative assistants, Crash is populated with singularly awful individuals who are power-hungry, clueless, conniving — or in most cases, all three. They’re cartoon villains in the Wall Street mode, and just as entertaining. Unfortunately, they’re all too real. The story begins with autocratic Merrill Lynch CEO Stan O’Neal, whose tendency to dispense with anyone who threatened him intellectually left the bank staffed with shady characters like Osman Semerci, a Turkish onetime rug salesman who loaded up Merrill’s balance sheet with $30 billion of toxic assets, and after being discovered and fired, headed out the door to his new job at a hedge fund with the quip, “It’s been a wild ride.” Then there’s O’Neal’s replacement, arrogant Goldman Sachs alum John Thain, who was brought in to save the day but seemed literally unable to to think about anything other than his bonus. And Thain’s overpaid consigliere, Peter Kraus, an effete art lover brought over from Goldman who is, like his pal, way too particular about his office decorating scheme. (“Please don’t lean on that,” Kraus says at one point, when a colleague leans on what appears to be a bookcase in his office. “It’s art.”)
So insanely self-centered are these men that when they finally realize, at the last minute, that Merrill might be on the verge of actual collapse, they’re left scrambling and have no choice but to fall into the hoary, liquor-breathed embrace of Bank of America. In Farrell’s telling, the merger with the Charlotte-based bank horrified the urbane New York sophisticates, though not exactly for the right reasons. (“It was as though the Beverly Hillbillies had taken over the largest bank in the country,” Thain thinks at one point when CEO Ken Lewis takes him out to meet his “drinking buddies,” a.k.a. the staff, “and Elly May Clampett and Jethro Bodine were on the management team.”) As you might imagine, Bank of America is filled with even more awful people. Among the clan is a man so awesomely awful as to bring a spot of relief to the proceedings — a man known by the comically sinister name of J. Steele Alphin.
As head of human resources at Bank of America, Alphin, a longtime friend of Ken Lewis who drank vodka on the rocks and loved sports cars, judged co-workers on the manliness of their hobbies. (“He could run the company one day,” Alphin reportedly said of Thain, after seeing pictures of him hiking. “He’s an outdoorsman, so he can’t be all bad.”) A former military-history major, Alphin instituted a creepy system in which senior executives at the bank were each assigned a “shadow,” an emissary from HR who followed them everywhere, taking notes and reporting back to Alphin on what they had said and done. He also guarded Bank of America’s culture with the zeal of Cerberus, as Merrill’s investment-banking head, Greg Fleming, would find when Alphin summoned him to his office to deliver this amazing speech:
“We’re like the wolf,” Alphin said, leaning over his chair, a playful smile on his face. “The wolf doesn’t hunt for packs of animals. It stays behind the pack and looks for the weak ones that can’t keep up, or the ones who wander from the pack.”
Fleming was transfixed.
“My advice to you is to stay up front with the herd,” Alphin said, warming to his topic. “Stay at the front of the pack. If not, the wolf will get you. And remember, the wolf is hungry and rarely fails.”
Fleming started to say something but didn’t know what to say.
In the end, though, the Alphin dog himself got gotten: Soon after Ken Lewis was forced to resign amid fraud allegations related to the acquisition of Merrill, he retired, too. But if he’s looking for a new career, he might have a future in helping Oliver Stone with his next screenplay.