I make no pretense toward understanding the world of complex international finance, but by the time most of us at RBC wake up tomorrow morning, the financial system might be unrecognizable.
Lehman Brothers will apparently declare bankruptcy, as other banks have given up trying to save it; the immediate hit could affect thousands of Lehman’s 25,000 employees. Instead, Merrill Lynch, whose stock has fallen 70% in the last year and has had to take losses upwards of $52 billion, will be purchased by Bank of America.
Nevertheless, there is a requisite political nugget in all of this not-so-creative destruction. Unsurprisingly, John Thain, who took over Merrill last year, is “almost certain to leave the firm”–a nice euphemism for being fired.
Have no fear for Thain’s future, however. He’s got plans, according to the Financial Times:
He is a fervent supporter of John McCain, the Republican presidential candidate, and some experts expect him to seek a political career.
Doesn’t it make you feel great thinking that Thain might be President McCain’s Treasury Secretary? I’m sure he’ll be staying in one of McCain’s houses if things get too tough for him.
UPDATE: My bad. I never should have suggested that Thain might have to be on the Cindy McCain dole. He was the most highly compensated CEO in America last year–$83.1 million dollars. It’s great how the market rewards quality.