Lehman Brothers was a legendary Wall Street partnership before a civil war over bonuses between its bankers and traders forced its sale to American Express in 1984 and led to its fatal failure a generation later in 2008. Morgan Stanley’s merger with a retail broker Dean Witter in the late 1990’s also triggered a civil war among its partners and the return of the wham-bam leveraged gunslinger John Mack, who almost wiped out its capital in the MBS meltdown.
Citicorp was once the most valuable New York money centre bank on the planet, as much a symbol of Pax Americana as Coca Cola and Hollywood. But a succession of power-crazed CEOs who were as imperial as they were incompetent led to the bank’s failure and bailout by Uncle Sam. Citi now trades at 6.4X and a price to tangible book value of a pathetic 0.7X, a banking Cinderella.
A civil war and palace coup is now brewing against Goldman Sachs (GS), once human history’s ultimate temple of money. CEO David Solomon is a target of a partner’s revolt that I do not believe he can possibly survive. Why?
