As the credit crisis continues to roil Wall Street boardrooms, new names are emerging as potential leaders for America's financial institutions. Who are they? CNBC’s Charlie Gasparino takes you inside Wall Street as only he can.
Following are excerpts from the report filed by CNBC’s Charlie Gasparino on “Fast Money.”
If Citigroup (C) was at the epicenter of the financial earthquake that rocked Wall Street, Merrill Lynch (MER) was just up the block. The nation’s third largest broker is about 50% cheaper now than it was three months ago, having lost over $37 billion for shareholders. Its celebrated chief Stan O’Neal has been kicked to the curb. And its storied reputation is sullied.
Merrill is more than just a broker. It’s a brand. It’s about trust. Rebuilding that takes more than a numbers guys. It takes an “Operator” says Gasparino, “someone just like Larry Fink.” He’s smooth with a laid back style that reveals his Southern California origins. But more important, Fink possesses an uncanny blend of trading and banking skills. While other CEOs are getting pink slips, the “Operator” is constantly getting job offers.
Why? Because for the past 20 years, he has helmed one of Wall Street’s greatest success stories: BlackRock. “I think what you can say about Larry is, you just want to look at BlackRock stock price and see how well that’s done over the past couple of years,” says Fox Pitt Analyst Roger Smith.
The number are, indeed staggering: Since going public in 1999 at $14 bucks a share, BlackRock has soared some 1300%. What started in 1988 as single office shop with just under $1 billion in assets has morphed into a global behemoth with over $1.3 trillion under management. Colleagues attribute Fink’s success to his unmatched ability to manage risks.
Case in point: While many financial stocks are trading near 52 week lows, BlackRock has largely avoided the credit crisis – off only 7% from its all-time high. “He really understands the way the markets work,” adds Smith. “Having that risk management background and really understanding how the risk works in the business would be incredibly beneficial to the investment banks.”
The Operator has a tough choice. Should he decide to save Merrill, he’d be putting his greatest asset at risk: his legacy. But if he stays at Blackrock, he risks leaving his legacy incomplete.
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According to Gasparino, if Fink wants the job it’s his for the taking and an announcement should come as soon as next week.
And with Fink as CEO expect a significant amount of layoffs at Merrill, says Gasparino. (The move should also boost Merrill shares, which to some extent, was reflected in Tuesday's price movement.)
Guy Adami and Pete Najarian both think MER is a buy on this “agent of change.”
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Trader disclosure: On Nov. 13, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (INTC), (YHOO); Najarian Owns (VMW), Najarian Owns (AMTD) Options, (AMZN) Options, (C) Options, (CSCO) Options, (GOOG) Options, (GS) Options, (XLF) Options, (YHOO) Options; Finerman's Firm And Finerman Own (GS); Finerman's Firm Owns (AMTD), (KALU), (KSS), (TYC), (WMT), (YHOO), (LTD), (TSO); Finerman's Firm Owns (HD) And (HD) Puts, Finerman Owns (HD); Finerman's Firm Owns (BIIB) Options, (CROX) Options, (MSFT) Options, (TGT) Options; Finerman's Firm Is Short (MER), (SPY), (IWM), (MDY), (IYR); Finerman's Firm Owns (LEH) Puts