Boom Bust and Blame

Crisis A-Z


Mack, John:
Chief Executive Officer and Chairman of the Board of Morgan Stanley. Before starting his tenure as CEO, Mack had been the President and Chief Operating Officer at the firm. He has worked at Morgan Stanley for nearly 30 years.

Mack was born on November 17, 1944 in Mooresville, North Carolina. He attended Duke University on a football scholarship and earned a Bachelor of Arts degree in 1968. After graduating, he started working as a trader in Wall Street for Smith Barney. He then started a very successful career at Morgan Stanley working his way up within the company. By 1993, he had become president of the firm.

Mack attempted to become CEO of Morgan Stanley in 1997 after a merger with Dean Witter Discover & Company. However, it was Phillip Purcell, from Dean Witter, who obtained the position. Mack went on to resign from Morgan Stanley in 2001 and started working as CEO for Credit Suisse, where he turned the ailing bank to profitability. Then, in 2004, he became the Chairman of the hedge fund Pequot Capital until his return to Morgan Stanley as CEO. He was elected to replace Purcell on June 30, 2005.

Mack and his wife, Christy, have three children.

Mason, Joseph:
An Associate Professor of Finance at Drexel University's LeBow School of Business, and a Fellow at the Wharton School. He has worked with the Office of the Comptroller of the Currency and a financial economist, and has taught at Georgetown University School of Business.

Mason holds a Ph.D. and M.S from the University of Illinois at Urbana-Champaign and a B.S. from Arizona State University. He has provided consulting and advising on issues such as mortgages, home equity loans, and credit card servicing to multiple government and private agencies including Freddie Mac, the Federal Reserve Bank of Philadelphia, and Wachovia, among others.

McCain, John:
Senior United States Senator from Arizona. A former Presidential candidate for the Republican Party, McCain was first elected for the United States Senate in 1986 after the retirement of Arizona senator Barry Goldwater.

Senator McCain was born on August 29, 1936, at Coco Solo Naval Air Station in the Panama Canal to naval officer John S. McCain Jr. and his wife, Roberta. Having a strong military history through his father and paternal grandfather, John McCain grew up in different naval bases around the world. He graduated form the Naval Academy at Annapolis in 1958, and then from flight school in 1960. His plane was shot down on October 26, 1967 during the Vietnam War and he became a prisoner for five and a half years until his release on March 14, 1973. For his service, McCain has earned the Silver Star, Bronze Star, Purple Heart and Distinguished Flying Cross.

Senator McCain was first elected to political office on November 2, 1982 after he won a seat in the House of Representatives from Arizona. He was re-elected for a second term in 1984. McCain earned a reputation as a conservative politician willing to reach across the aisle and, in 1986, he was elected to the United States Senate. He has remained in the Senate for four terms always winning elections by large margins. In November 2004, he was re-elected for his fourth term with an overwhelming 77 percent of the vote.
Throughout his political career, Senator McCain has run for the Presidency twice. In 2000, he lost the Republican nomination to George W. Bush, and in 2008 he was defeated by Democratic candidate Barack Obama.

John McCain married his second wife, Cindy, on May 17, 1980. They live in Phoenix, Arizona and have four children: Megan, John IV, James, and Bridget.

McDaniel, Raymond:
Chairman and Chief Executive Officer of Moody's Corp. He assumed the positions in April 2005. Before becoming CEO, McDaniel had been Vice President of the firm since 2003, and President and COO since 2004. He has been part of the company since 1987.
McDaniel attended Colgate University and earned a Bachelor of Arts degree in political science and later attended Emory University School of Law and obtained and Juris Doctor Degree. He started his career at Moody's as a Senior Analyst in the Asset Securitization Department in New York. He grew within the company and held positions such as Managing Director for Moody's Europe and Senior Managing Director for Global Ratings & Research.

Merrill Lynch:
Distressed by the global economic crisis, the giant global financial services institution had to be bought by Bank of America. The announcement was made on September 13, 2008 and the deal became effective in January 1, 2009. As a result from the merger, Bank of America has become the largest brokerage in the world with more than $2.5 trillion in client assets.

As a subsidiary of Bank of America, Merrill Lynch provides investment banking, asset management, and capital markets services from its main headquarters in New York City. The firm's history goes back to 1914, when Charles Merrill founded it under the name Charles E. Merrill & Co. A year later the name was changes to Merrill Lynch & Co. after Edmund Lynch joined the company.
Molinaro, Sam:Bear Stearns CFO, who single-handedly rocked the financial markets on August 3, 2007, when he told analysts on a conference call that "It's as been as bad as I've seen it in 22 years. The fixed-income market environment we've seen in the last eight weeks has been pretty extreme." That dire assessment of the market triggered a tidal wave that sunk stocks and currencies but boosted bonds as investors sought the safety of taxpayer-backed debt. Three days later, Molinaro was named COO. He joined Bear Stearns in 1986. In October 1996, Molinaro was promoted to CFO. Molinaro took a part-time position in September 2008 as a consultant to Paulson & Co., the hedge-fund firm that in July 2007 accused Bear Stearns of attempting to control the market in securities backed by subprime mortgages.

The Money Store:
Originally founded in Florham Park, New Jersey in the mid-1990's, the Money Store was a pioneer in the subprime mortgage market, making home equity loans to people with blemished credit. The Money Store hired two baseball Hall of Famers to be their TV pitchmen: Phil Rizzuto and Jim Palmer. The business was lucrative for many years, and it grew quickly for three decades. The company charged high interest rates, typically 5 percentage points over a standard mortgage rate. Even so, the rate was 5 to 10 points less than credit-card issuers charged, and some interest was tax deductible.

The company moved its headquarters from New Jersey to Sacramento in the late 1990s and then from Sacramento into a 400,000-square-foot building it built in West Sacramento. Morton Dear was Chief Financial Officer and Vice Chairman. The Money Store had annual revenue of $831 million. As the area's largest publicly traded company with local headquarters, it employed 5,000 people, nearly three-fifths of them in West Sacramento, California.

First Union Bank bought the Money Store for $2.1 billion in July 1998, and a month later, the bottom fell out of the entire subprime market. Many large companies in the sector shuttered after heavy losses. First Union took a $2.6 billion charge against earnings, and in June 2000, the bank shut down many parts of the former Money Store operation. First Union also abandoned the name. Several years later, First Union abandoned its own name in favor of Wachovia Corp., the name of a smaller bank it bought in 2001.

What remained was called HomEq. It serviced the remaining Money Store portfolio, and loans from the First Union Home Equity Bank, now called Wachovia Home Equity Bank, a total of about 360,000 loans worth $19 billion.

In 2002, Dear started Mortgage Lending Direct, aka MLD Mortgage, and convinced Wachovia to sell him The Money Store brand name for an undisclosed figure. The brand was then repositioned as an online loan exchange, based in Florham Park, New Jersey. The company has 60 employees and uses technology to allow customers to shop for home loans from wholesale lenders nationwide. Its technology allows borrowers with good credit to find loans and a set rate while online, rather than having to wait days. The company also has a large lending operation for tax-deferred real estate exchanges under Section 1031 of the tax code, and it does referrals with a student loan operation. The company says it does some lending for borrowers with blemished credit, but that is a niche, not its focus.

Headquartered in New York City since its founding in 1909, Moody's (NYSE: MCO) is a ratings agency that provides financial research and analysis on different government and commercial companies. As a leading source for credit ratings, Moody's oversees ratings in over 100 countries.

Raymond McDaniel, who has been Chief Executive Officer since 2005, currently leads Moody's, which is valued at a $6.1 billion market cap.

Moral Hazard:
The risk presented by how a contract may affect the behavior of an individual or institution involved in the agreement. In insurance, the insurer may take a greater risk because of the protection provided by a certain contract. If they weren't protected, they would not take the same risk.

Morrice, Brad:
Former President and Chief Executive Officer of New Century Mortgage as well as one of the co-founders of the company, which was forced to file for Chapter 11 Bankruptcy Protection on April 2, 2007.

Morrice had been Chief Executive Officer since July 2006, President since December 1995, and Vice Chairman of the Board since 1996. On June 12, 2007, Morrice's contract with New Century was terminated. He received a J.D degree from the University of California and a M.B.A degree from Stanford University.

A loan aimed to finance the purchase of a house or other real state property. Such loan usually involves interest rates and detailed payment periods. It often acts as a lender's security for the money borrowed by the mortgagor, who is the person bound by the mortgage.

Mortgage-backed security:
Also known as mortgage-backed certificates, mortgage-backed securities are groups of mortgages packaged together by banks in order to be sold to financial institutions like Fannie Mae or Freddie Mac. Financial institutions then re-package the mortgages so they can be sold to individual investors in a secondary market. Banks that issue mortgages sell them off in order to clear their balance sheets and make further mortgage commitments to earn more fees.

Mozilo, Angelo:
Co-founder, former Chairman of the Board, and former Chief Executive Officer of Countrywide Financial. He founded the mortgage lending company with partner David S. Loeb in 1978 in New York and then moved it to Calabasas, California.
After attempting to keep his company afloat throughout 2007, Mozilo ultimately had Bank of America buy Countrywide for $4 billion. Bank of America officially made the announcement on January 11, 2008.

On June 4, 2009, Mozilo was charged in a civil lawsuit filed by the U.S. Securities and Exchange Commission in Los Angeles accusing him of insider trading and securities fraud.

Mozilo was born in New York City in 1938. He started working for his father's butcher shop at age 12 and then became a messenger for a Manhattan mortgage lender. He attended Fordham University and earned a B.S degree in 1960 while working at the mortgage firm. After graduation, he decided to work full time for the mortgage company and, after the firm merged with David Loeb's Lomas Realty Securities, Mozilo became Loebs' protégé. The two started a mortgage bank which they named Countrywide Credit Industries.

Mozilo is married and has five children.

Mudd, Daniel:
Former President and CEO of Fannie Mae. He served from June 1, 2005 and lasted until September 7, 2008 after he was dismissed and the Federal Housing Finance Agency took control of the firm.

Mudd was born in 1956 and is the son of Roger Mudd, an Emmy Award-winning TV anchor. Mudd attended the University of Virginia and earned a Bachelor of Arts degree in American history. He then attended Harvard University, where he obtained an M.P.A from the John F. Kennedy School of Government.

Throughout his professional career, Mudd assumed different managerial and consulting positions in companies such as Xerox Corporation, Ayers Whitmore and Co., and the World Bank. Later, Mudd settled in GE Capital, where he held different positions including Vice President of Business Development in 1991, Managing Director for International Financing in 1993, and President and CEO for European Fleet Services in 1995. Before joining Fannie Mae in 2000, Mudd was serving as President and CEO of GE Capital, Japan; a job he had been doing since 1996. When he became part of Fannie Mae, he served as Vice Chairman and Chief Operating Officer of the company until he was appointed as CEO in 2005.