That was quick. This morning, Merrill Lynch chief John Thain was lobbying for a $10 million bonus. By the early afternoon, Attorney General Andrew Cuomo had sent off a letter denouncing the idea. Now CNBC is reporting that Thain has relented and has accepted his bonus-less fate. He's not the only one. CNBC also reports that Morgan Stanley CEO John Mack won't be getting one either.
♦ Don't expect another winning day on Wall Street: Stock futures pointed lower following grim news about unemployment and consumer spending. [WSJ]
♦ Consumer spending fell 1 percent in October, the steppest decline in seven years. And the four-week average of new jobless claims hasn't been this high since January 1983. [CNN, WSJ]
♦ Good news: Shares of Citigroup appear to have stabilized. Bad news: Not everyone is convinced the rescue plan will be enough to keep Citigroup solvent. And it's never a good sign of things to come when your head of human resources suddenly jumps ship. [WSJ]
John Mack probably won't be celebrating much this year given the financial crisis, but the Morgan Stanley CEO turns 64 today. Also turning 64 on this Monday: SNL creator Lorne Michaels and Danny DeVito. Martin Scorsese is celebrating his 66th. Lauren Hutton is 65. Howard Dean turns 60. Former MTV House of Style host Daisy Fuentes is turning 42. Drag performer RuPaul, is turning 48. Isaac Hanson, of the Hanson brothers, turns 28. In the weddings department, hotelier Ian Schrager tied the knot with another former ballerina on Saturday night named Tania Wahlstedt. And Rob Speyer, the president of Tishman Speyer and son of real estate billionaire Jerry Speyer, married Anne-Cecilie Engell over the weekend.
♦ In a extraordinarily bold move, the U.S. will use $250 billion to take equity stakes in major financial institutions like Citigroup, Bank of America, Wells Fargo, Goldman Sachs and JPMorgan Chase as part of an effort to restore confidence in the system, unlock the credit markets and "avoid financial collapse." [WSJ, NYT]
♦ The government's move isn't unprecedented, although not everyone is very happy with the "partial nationalization" approach. [NYT, WaPo]
♦ Global markets continued to rise overnight as investors responded to news of the government's plan. [Bloomberg]
♦ Notwithstanding the bailout, some hedge fund titans like Steve Cohen, John Paulson, and Israel Englander are staying on the sidelines and keeping their billions in cash. [WSJ]
The most unhappy man on Wall Street today might very be John Mack, the CEO of Morgan Stanley, who watched the banking giant's stock price dip below $10 today. Morgan Stanley is now frantically reassuring investors that a deal with Mitsubishi UFJ to inject $9 billion into the beleaguered bank is still going to go ahead, notwithstanding the grim fact that Morgan Stanley's stock has slid 70 percent since Mitsubishi cemented the deal with Mack on September 22nd.
♦ Citigroup dropped efforts to block a deal between Wachovia and Wells Fargo yesterday afternoon; it will, however, continue to press ahead with its $60 billion lawsuit. [NYT, WSJ]
♦ Morgan Stanley CEO John Mack is back on the defensive today after the bank's shares dropped nearly 26 percent yesterday to $12.45, the lowest closing price in a decade. [DB, WSJ]
♦ Barclays, which acquired the assets of Lehman Brothers last month, now plans to cut another 3,000 jobs. [Fortune]
♦ The Federal Reserve and Treasury are working with Congress on a sweeping bailout program that would represent the biggest intervention in financial markets since the '30s. Asian and European markets soared on the news. [WSJ, Bloomberg, NYT]
♦ Five banks are now looking at Washington Mutual, including Wells Fargo, JPMorgan Chase and HSBC. [WSJ, Dealbook]
♦ Morgan Stanley's John Mack fought for his life yesterday, lobbying for regulatory changes, twisting arms, and discussing deals with potential partners. China's sovereign wealth fund, China Investment Corp, is now believed in be in discussions to take a 49 percent of Morgan. [WSJ, Marketwatch]
The Times reported on the front page of the paper today that Morgan Stanley CEO John Mack approached Citi chief Vikram Pandit on Tuesday night about combining the two banks. "We need a merger partner or we're not going to make it," Mack allegedly told Pandit. True? Probably not! Remember when Times said that Zoe Cruz would succeed Mack as Morgan's CEO and then she was fired 19 days later? Exactly. Well, the Times has since backpedaled: "The Times's two sources have since clarified their comments, saying that because they were not present during the discussions, they could not confirm that Mr. Mack had in fact made the statement. The Times should have asked Morgan Stanley for comment and should not have used the quotation without doing more to verify the sources' version of events." Maybe the Times also should try and spell names correctly when issuing corrections? [NYT]
Things at Morgan Stanley are getting uglier by the minute. Shares are down another 25 percent thus far today and hedge funds have been directing their business elsewhere. John Mack is now reportedly stepping up merger discussions with Wachovia. There's also talk of splitting the bank in two, a "good bank" and a "bad bank." Because that idea worked out really nicely for Lehman, didn't it? [Dealbook]
♦ The world's major central banks teamed together to flood the markets with dollars as part of an effort to contain the unfolding financial crisis. [WSJ, NYT]
♦ Morgan Stanley has been in talks with Wachovia, Wells Fargo and the Chinese bank Citic; Morgan's CEO, John Mack, blames short sellers and rumors for yesterday's big drop. [NYP, CNBC, Dealbook, WSJ]
♦ Washington Mutual's bankers at Goldman Sachs are "frantically looking for a buyer or a capital infusion in the next several days." [NYP]
♦ Rules introduced by the SEC today will make it harder for traders to drive down prices and will require them to share more info about their trades. [WSJ]
Mack is the chairman of Morgan Stanley. He stepped down as the firm's CEO at the end of 2009, handing over the reigns to James Gorman.
