The Wisdom of Melville
"If your banker breaks, you snap." - Herman Melville, Moby Dick
During the summer between the day I resigned from JPMorgan after eighteen years, and the horror of witnessing 9-11 up close and personal, I joined a couple of friends on their fifty foot sailboat in an attempt to sail across the Atlantic Ocean. What better time to read Moby Dick, I thought.
One thousand miles into the journey, about a third of the way to England, we were struck by a humpback whale, destroying our rudder and leaving us floundering on the Atlantic.
Having read Synchronicity by Leon Jaworski, and seen this Jungian idea play out in my own life, I am a firm believer in the important hidden meaning of seemingly coincidental events, whch suggests there are no coincidences. Yet for ten years now, I’ve been unable to connect the dots between my work on the imperative to transform economic and financial systems and the unlikely circumstance for me to decide to attempt an Atlantic crossing (I’m generally a small boat sailor), to pick up the daunting Moby Dick (I generally read non-fiction), and for us then to get slammed by a great whale.
I can now thank Carla Seaquist for showing me the meaning of this coincidence. In her insightful essay “Wall Street: Brush up your Melville”, she compares Jon Corzine (and implicitly all “Captains of Wall Street”) to Captain Ahab, although her treatment of them is far gentler than one might expect in the circumstances.
I’ve been pondering what to think about the whole MF Global affair, and John Corzine in particular. The man is an enigma to me, but worthy of careful study. In the modern financial world where the incredible has a way of becoming the ordinary, Corzine’s tragic journey is truly remarkable. The people I know who know Corzine well say he’s one of the good guys. His character and integrity were highly praised, and his decision to commit himself to public service was widely respected. I recall one senior Wall Street trader saying at the time Corzine announced he was running for the Senate, “I don’t know why he’d want to do such a thing, but I know he’s genuinely committed to giving back.”
As the senior partner of Goldman Sachs when it went public, allowing the current partners to reap an unprecedented windfall thanks to generations of franchise building toil and sacrifice by the prior partners of the firm, Corzine certainly took a lot - $400 million is the number widely reported.
As CEO of Goldman during the Long Term Capital fiasco, Corzine pushed for Goldman’s participation in the bank consortium bailout of the failed hedged fund in order to save the banks’ collective skin, and a strong Goldman seat at the table, which came in the form of John Thain on the bank consortium’s governing board. That Goldman was in so deep with Long Term Capital that it had to double down in the rescue is probably the reason Corzine lost out in a power struggle to Hank Paulson and had to leave the firm.
Corzine’s career in public service was unremarkable beyond the reported $130 million of personal funds he invested to get himself elected first to the Senate and then as Governor of the State of New Jersey. That record stood until Michael Bloomberg rode into town, investing more than $250 million (according to the NY Times) of his Wall Street fortune to become Mayor (getting three terms when the term limits say two costs money). Defenders of such spending claim that neither candidate became beholden to the special interests that finance most politicians’ campaigns.
That’s a false choice. And John Corzine’s rise and now climactic fall from grace as the CEO of MF Global, a relative “bucket shop” in comparison to the Goldman Sachs he once ran, with somewhere between $600 million and $1.2 Billion of customer money still unaccounted for, should give one pause.
Lin Yutang, the Chinese best selling philosopher in the 1930s reminds us that “there is a convenient American word which combines the three great (deceptions) of Fame, Wealth, and Power into one great (deception): Success.”
From what I can tell, Jon Corzine and Michael Bloomberg are good men. No doubt they are “successful” by our cultural standards. It may not be a coincidence, however, that the source of both Corzine and Bloomberg’s wealth, fame, and power is the transformation of Wall Street into a capital markets trading casino, disconnected to the virtues we as a society hold dear.
Corzine the trader may have made his last trade: Italian bonds on a bet there would be a government bailout. Bloomberg, the shrewd architect of a data munitions monopoly for the casino arms race, now faces the ultimate challenge to his legitimacy and legacy. The harsh reality of the damage to Main Street this Wall Street transformation has in no small part enabled is what’s behind the OWS movement. My bet is this movement is just beginning. Let us hope Mayor Bloomberg finds his humble, prudent Starbuck to help guide his leadership in the months ahead. In doing so, he can elevate his game past success to wisdom.