The Next CEO of Merrill Lynch Is...

Since there is a Fed meeting this week that has meaning and given the dearth of other news in the financial world (Riding on a plane with Warren Buffett on his trip to China does not qualify as breaking financial news, sorry CNBC), all eyes are focused on Stan O'Neal's departure from Merrill. Whether or not you think his exit is justified, his leaving has become a foregone conclusion now that he went behind the board's back, the same board that put him into that job over other, some would say, more qualified candidates. Merrill seems to go through these gut-wrenching fits every five years or so. They get into trouble when they stray too far away from what they do best, catering to the needs of private clients. That certainly what has happened here with these massive credit market exposure writedowns. It happened back in '98 after another fixed income blow up, Russia. Then, they exited a fixed income sector that I traded at a large competitor. I had one of the best months of my career, picking up Merrill's inventory on the cheap and having one less major competitor to deal with. For Merrill, this cycle is nothing new. What's different is that this time it goes all the way to the top. Stan O'Neal never enjoyed the unquestioned support of the 15,000 financial advisors as previous CEOs did. He wasn't one of them.

Who's next? Page C1 of today's Wall Street Journal has the pictures of the likely candidates: John Thain; Greg Fleming; Bob McCann; and Larry Fink. I'm going to shoot all of their candidacies down, knowing full well by the time I finish writing this one of them may have already accepted the job, and make my own suggestion. John Thain already was president of Goldman; why would he want the Merrill job? Besides, Thain wants Chuck Prince's job. Fleming knows the markets, but as far as the Merrill FAs are concerned, he's just another Stan O'Neal. He didn't come from their ranks and would not be acceptable to the FAs. Bob McCann would fit that description as far as Merrill's brokers are concerned, but he know little about that troubles the firm currently faces. Still, McCann would be the safe choice by placating the salesforce. That leaves Larry Fink. He certainly is the best all around candidate, but he has it pretty good over there at BlackRock. I'm not sure he wants to leave to take the Merrill job. It is also questionable how much of an outsider, which seems to be the consensus as to whom would be best for Merrill, Fink is , as Merrill owns 49% of BlackRock.

Having said all that, and not trying to be too self-serving, but I would like to put forth yours truly for the Merrill CEO position. I am definitely an outsider, certainly have the fixed income experience, and am very knowledgeable as to the workings of a large retail brokerage firm. So, if anyone on the Merrill board is reading this, except Stan O'Neal and Bob McCann of course, feel free to contact me at your convenience.