Mack the knife: I made money crypto and I don’t know how

John Mac cemented his place in Wall Street folklore during the depths of the 2008 financial crisis when, as CEO of Morgan Stanley, he secured a $9 billion investment from Japan’s MUFG.
The infusion of cash gave Morgan Stanley a bailout and allowed it to push back an alternative bailout paid for by then-New York Federal Reserve Chairman Tim Geithner, who wanted Mac to agree to a merger with rival JPMorgan.
“Tell Tim to go to hell,” said his aide, who was in contact with Geithner during negotiations with MUFG Bank.
After 14 years, the 78-year-old begins what appears to be the last activity of his career. Last month, he published his memoir, which received mixed reviews from critics. He charts his journey from second-generation Lebanese immigrant from Morrisville, North Carolina, to CEO of one of the largest investment banks on Wall Street.
Something that gives Mack’s final appearance particular significance is the revelation at the end of the book that his memory is showing early signs of fading. He was recently diagnosed with mild cognitive impairment, which could be the early stages of Alzheimer’s disease.
“I don’t need sympathy,” Mack said in a recent interview with the Financial Times. “But I don’t want to put people off me if I tell them the same thing more than once or twice, which I do. “
He was characteristically dismissive of critics who derided what they saw as the autobiography’s lack of self-awareness. “I have to be honest with you, I don’t care, okay? Do you think I do?” He added: “If people think I have a big ego, I have a big ego. I don’t care.”
But he was more reflective of the changes that have taken place on Wall Street since the crisis in which he played a leading role, arguing that his successors have moved away from focusing on short-term profit-making and embraced a safer financial system.
“The money-only culture is the wrong culture,” he said. “I think the crisis made everyone smarter, and I would argue it made them more conservative.”
“Maybe 25 years from now it will all melt away and it will go back to the mentality of ‘let’s take risks and make as much money as possible’. But I think boards are more curious. I think risk committees are more robust.”
Mack was less optimistic about the faltering crypto industry’s prospects. “I tried the crypto market, I didn’t understand it, and I still don’t understand it. Believe it or not, I made money and I still don’t know how I made it in cryptocurrency. I don’t know which crypto is,” he said.
After spending his life on Wall Street, Mac stepped down as CEO of Morgan Stanley in 2010, by which time he had earned the nickname Mac the Knife “Mac the Knife” due to his penchant for job cuts.
After graduating from Duke University in 1968, he began his career as a finance clerk at the brokerage firm Smith Barney, in which he would eventually acquire a controlling interest in 2009, towards the end of his tenure at Morgan Stanley.
He first joined Morgan Stanley in 1972 to help grow its fledgling fixed-income division, becoming chairman in 1993 before being ousted in 2001 after a power struggle.
In that incident, he was beaten out by Philip Purcell, who joined Morgan Stanley after the bank merged with retail broker Dean Witter in 1997. Purcell and Mack competed for leadership of the combined company, and Mack lost.
“Although it was a pain, thank God we combined Dean Witter,” Mac said of the deal. “Having a top-tier investment bank and a world-class retail brokerage owned by Morgan Stanley are excellent benefits.”
After stints at Credit Suisse and Pequot Capital Management, Mack returned to Morgan Stanley in 2005 to replace Purcell as CEO. During his second term, he won plaudits on the MUFG deal, but by the time he left in 2010, the bank’s share had lagged behind arch-rival Goldman Sachs.
The opposite is true under James Gorman, Mac’s successor, who bet on wealth management, a focus that traces its origins to the Dean Witter deal.
Goldman now faces the weakness of a stagnant stock market, while investors applaud Gorman for creating a pioneering wealth and asset management franchise by building on the acquisitions of Smith Barney and Dean Witter.
Mac has nothing but praise for the man who succeeded him in command from Morgan. “Under James, I’m very optimistic,” he said. “I still hold my shares. I haven’t sold anything. I believe in him and what he’s doing.”
Since leaving the bank, Mac has held roles at private equity firm KKR and Russian oil company Rosneft, which he left in 2014, a year after joining.
Nearing the end of his long career, Mac said he found one way to build his confidence: “I play golf. I’m bad at this game, so forget about my ego.”

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