The Winners and Losers of the Wall Street Mess

The head of Merrill Lynch, the 94-year old investment bank, might just be the shrewdest player on Wall Street, even though his swift move probably means he'll be out of a job. When government officials and the heads of the top investment banks convened meetings this weekend to find a buyer for the near-bankrupt Lehman Brothers, it was Thain's ailing Merrill Lynch who walked away with a marriage. In less than 48 hours Bank of America agreed to a $50 billion takeover of Merrill Sunday night, just as Lehman prepared to file for Chapter 11 bankruptcy.

The former Goldman Sachs president and head of the New York Stock Exchange, had been traveling the country hosting town hall meetings to answer questions and calm worried Merrill employees. He cancelled his trip to Asia and courted Bank of America instead. A bankrupt Lehman would only send more shockwaves through the market. Thain reasoned it was better to sell now than try and find an investor to bail out a bank Merrill's size down the road. With $45 billion in writedowns since ceo Stanley O'Neal's departure and 4,000 layoffs, the man known as Mr. Fix-It cobbled together an 11th hour deal to avoid Lehman's fate. "He bet that he was better off losing something now than losing everything," says Roy C. Smith, professor of finance at New York University's Stern business school, who worked with Thain at Goldman Sachs. "Most of us would think that was a sensible thing to do."

Analysts predict Thain will likely leave after completing the acquisition he orchestrated. He shouldn't have problems finding his next job. "He has been close to John McCain for a long time," says Smith. Should the Republican win the White House, Thain's departure might be perfect timing.

—By Kristina Dell