Merrill Lynch exec sees no quick recovery for industry, calls slowdown biggest in decades
Merrill Lynch & Co. CEO John Thain, who's overseeing the sale of the securities firm to Charlotte's Bank of America Corp., said the financial industry will be slow to rebound as the global economy contracts.
“I do not think that this is going to be a quick recovery,” Thain, 53, said Tuesday at a banking conference hosted by Merrill in New York. “This is not like '87, it's not like '98, it's not like 2001. The contraction that's going on is bigger than that. I think we will in fact look back all the way to the 1929 period to see the kind of slowdown we're experiencing now.”
Merrill, the biggest brokerage in the United States, was forced to sell itself after its shares tumbled 80 percent and it lost $24 billion over five quarters on writedowns and credit losses stemming from the collapse of the subprime mortgage market.
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Thousands of Merrill and Bank of America employees will lose their jobs because of the merger as part of a plan to cut $7 billion in expenses, Thain said on Oct. 20. The purchase is expected to be completed on or about Dec. 31.
Bank of America has chosen Thain to head global banking, securities and wealth management at the combined companies. Thain was also named to Bank of America's 11-member executive management group, headed by CEO Ken Lewis.
Wells Fargo chief in Winston-Salem today,will address Wachovia employees
Wells Fargo & Co. chief executive John Stumpf will speak to Wachovia Corp. employees and local officials in Winston-Salem today, continuing a tour of the bank's main hubs.
San Francisco-based Wells Fargo is buying the Charlotte-based bank, after Wachovia neared collapse in September. The deal, initially valued at $15.1 billion, is expected to close Dec. 31.
When Stumpf addressed Charlotte employees in October, he said his job was to keep workers at the combined company but added: “obviously, no commitments, no promises.” Wells has said it plans to reduce annual expenses by $5 billion at the combined company but hasn't given details on expected job cuts.
Winston-Salem was Wachovia's headquarters until the bank was acquired by Charlotte-based First Union Corp. in 2001. The city remained the base for the bank's wealth management unit.
PlainsCapital to buy First Southwest Holdings
Dallas-based financial services company PlainsCapital Corp. said Tuesday it has an agreement to buy Dallas-based investment bank First Southwest Holdings Inc., which has a Charlotte office.
S.C. governor tells taxpayers to protest bailout
S.C. Gov. Mark Sanford said Monday taxpayers are being fleeced in the nation's financial bailout, citing his concerns about the retirement of a South Carolina bank executive.
“Complain to national leaders,” Sanford urged taxpayers during a news conference. “E-mail or phone your elected leaders. I'm suggesting, begging, people to make their voices heard.”
Sanford said the federal government has injected $2.3 trillion into the private markets, leaving taxpayers to foot the bill.
He also voiced concerns about the abrupt retirement of Mack Whittle, chief executive of The South Financial Group. Whittle was scheduled to retire at year's end but stepped down earlier this month. Critics said that move protected his $18 million retirement package.