Tag Archives: Merrill Lynch

Get What’s Yours Rise to the Top Demonstrates Our Insecurity

GetWhat'sYoursCoverWhat does it say about Americans when a book about Social Security zooms to the top of the best-seller lists?

I say we are just insecure.  Or uninformed.  Or panicky.  Or lots of things.

As a elixir, book readers are buying Get What’s Yours:  The Secrets to Maxing Out Your Social Security (Simon & Schuster, 2015) by Laurence J. Kotlikoff, Philip Moeller, and Paul Solman.

Here is where the book stands on Amazon.com as I write this today:

The book is # 3 on the Wall Street Journal hardcover business best-seller list and # 4 on the non-fiction list.  I cannot find updates for the Bloomberg Business Week.  The book’s website claims that it is a New York Times best-seller, but I cannot verify that this morning as I write.  But, since the book has only been out since February 17, 2015, its rise to the top is meteoric.  It certainly did not hurt sales when Jane Pauley said this is “an indispensable and surprisingly entertaining guide for anyone who is retiring or thinking of retiring with all of the Social Security benefits they’ve earned.” With a flurry of endorsements from financial experts, many readers must have flocked to the physical and on-line outlets to see what it says.  Or, it likely did not hurt when the summary on Amazon.com proclaimed, “Many personal finance books briefly address Social Security, but none offers the thorough, authoritative, yet conversational analysis found here. You’ve paid all your working life for these benefits. Now, get what’s yours.
And, who wouldn’t be interested in a book with a summary from such as this:  “It tells you precisely which months you should collect retiree, spousal, survivor, divorcee, parent, and child benefits to achieve the highest lifetime benefits.  Maximize My Social Security incorporates all Social Security provisions and options for singles and married couples.
Who are these authors?  The book’s website provides these details:

Laurence Kotlikoff

Laurence J. Kotlikoff is William Fairfield Warren Distinguished Professor and a professor of economics at Boston University.  He is also president of Economic Security Planning, Inc., a company specializing in financial planning software.  His company websites are ESPlanner.com and MaximizeMySocialSecurity.com.  He is author or co-author of sixteen books, including Spend ‘Til the End and The Coming Generational Storm (both with Scott Burns).  His work has appeared in The New York Times, The Wall Street Journal, The Financial Times, Bloomberg, Forbes, The Economist, Huffington Post, and other major publications.  He has served as a consultant to the International Monetary Fund, the World Bank, governments around the world, and major U.S. corporations including Merrill Lynch, Fidelity Investments, and AON.  In addition, he has provided expert testimony on numerous occasions to committees of Congress.  He lives in Boston.

Philip Moeller writes about retirement for Money magazine, the PBS website Making Sen$e, and other media outlets.  He is also a research fellow at the Sloan Center on Aging & Work at Boston College, and the founder of Insure.com, a site for insurance information that has provided original insurance content to the Web’s leading business portals, including Microsoft, Yahoo, America Online, and MarketWatch.  Formerly a contributing editor at U. S. News & World Report, he has spent forty years as an award-winning financial journalist, Internet entrepreneur, and corporate communications executive for a Fortune 500 financial services firm.  He lives in Richmond, Virginia.

Paul Soloman

Paul Solman is the longtime business and economics correspondent for The PBS NewsHour.  His many awards for work in business journalism include Emmys, Peabodys, and a Loeb award.  He is also a Brady-Johnson Distinguished Practitioner at Yale University, where he teaches in the Grand Strategy course, as well as teaching at New Haven’s Gateway Community College. He has been a member of the Harvard Business School faculty and a visiting professor at his alma mater, Brandeis.  Solman has written for numerous publications, from Forbes to Mother Jones, co-authored (with Thomas Friedman) Life and Death on the Corporate Battlefield, and wrote the introduction to Morrie: In His Own Words, created entirely from interviews with his former Brandeis sociology professor, Morrie Schwartz (of “Tuesdays with Morrie” fame).  He lives in Newton, Massachusetts.

We won’t have this book at the First Friday Book Synopsis in Dallas, as we don’t include individual-based finance books in our monthly coverage.

But that doesn’t mean that plenty of our attendees will find this important to read.  While they won’t identify themselves, I am sure we get some people who are insecure, uninformed, and panicky about their retirement years.  Maybe they. and many others will find this book a great relief to that anxiety.

Who Should You Hire – The Expert Or The Crony?

(personal note:  this is the longest I’ve gone without much blogging activity.  My apology — I had a little health set back {it seems ok now} — and I’ve been playing catch-up, not all that successfully, for a while.  Hopefully, by next week, I’ll be back to normal).


cro·ny·ism noun \-nē-ˌi-zəm\: partiality to cronies…without regard to their qualifications (emphasis added)

The expert or the crony?

Here’s the thing.  We live in an interdependent, overly connected age.  What happens in one place, in one company, in one organization, has very far-reaching ripple effects.  So, whereas before, the hiring of a crony might hurt a few people, now, in this new world of so many intertwining connections. the hiring of a crony might hurt an avalanche of others.

So, here’s the story…  I have presented my synopsis of All the Devils are Here three times in the last couple of weeks.  I began each presentation with the story that opens the book.  It is about John Breit, the top risk manager at Merrill Lynch in the 00’s.  But Merrill Lynch was making too much money to pay attention to the risks – they just wanted to keep it going.   So, Breit was removed, and replaced with a friend of the CEO, Stan O’Neill.  A friend who did not have the right expertise, enough expertise – a friend who simply was not an expert at risk, he “didn’t seem to know anything about risk.”  And when some in the firm understood his value and begged him to come back, he came back, but was denied access, shunted aside, ignored… he was too much of a pain to those with money to make and warnings to ignore.

If only they had listened – earlier.

So, here is an excerpt of the account from the book, All the Devils are Here:  The Hidden History of the Financial Crisis by Bethany McLean and Joe Nocera:

It was September, 2007.
Slowly, over the years, John Breit had been stripped of his authority – and, more important, his ability to manage Merrill Lynch’s risk.  First (Stan) O’Neal had tapped one of his closest allies to head up risk management, but the man didn’t seem to know anything about risk.  Then many of the risk managers were removed from the trading floor.  Within the span of one year, Breit had lost his access to the directors and was told to report to a newly promoted risk chief, who, alone, would deal with O’Neal’s ally.  Breit quit in protest, but returned a few months later when Merrill’s head of trading pleaded with him to come back to manage risk for some of the trading desks.
In July, 2006, however, a core group of Merrill traders had been abruptly fired.  Most of the replacements refused to speak to Breit, or provide him the information he needed to do his job.  They got abusive when he asked about risky trades.  Eventually, he was exiled to a small office on a different floor, far away from the trading desks.
(After telling Stan O’Neal of the serious and massive exposure of Merrill Lynch) John Breit walked back to his office with the strange realization that he – a midlevel employee utterly out of the loop – had just informed one of the most powerful men on Wall Street that the party was over.
Merrill Lynch was in an awful lot of trouble—and the company was still in denial about it.

So, after one of these three presentations, a man  — a man who is used to paying attention to the fiscal health of large organizations — pulled me aside, and observed very simply that the opening story of the book is the most important part of the book.  The head of Merrill Lynch replaced the expert with a friend, and thus lost the voice, the wisdom, the clear thinking of the expert.  And when you replace the expert with a crony who is not an expert, the ball game is over.

And so, taken over by Bank of America because there were no other alternatives, the crony proved unequal to the task.  And the ripple effects are still being felt.

It seems like quite a choice, but it should be no choice at all.  The expert, or the crony?  There is only one answer that is right – but, sadly, it is an answer rejected time and time again.

All The Devils Are Here, Lesson #1 – We Really Do Like To Turn A Deaf Ear To Bad News

Good business books do two things.  They tell a good story, and they give us the facts/principles/lessons that flow from these stories.

I’m barely into All The Devils Are Here by Bethany McLean and Joe Nocera, my selection for the February First Friday Book Synopsis, and I’m already hooked.  The opening story of the book is about John Breit, a “midlevel employee,” who knew that Merrill Lynch was in deep, deep trouble.  A risk manager, he had been shunted aside and ignored and replaced and lost access and “demoted” to a position with no “teeth,” until one day…

“Sam O’Neal wanted to see him.  How strange.”

Sam O’Neal was the CEO of Merrill Lynch.  And O’Neal had finally begun to wonder if there might be trouble brewing…

Here’s how the prologue ends:

Briet realized that O’Neal seemed to have no idea that Merrill’s risk management function had been sidelined…

John Breit walked back to his office with the strange realization that he – a midlevel employee utterly out of the loop – had just informed one of the most powerful men on Wall Street that the party was over.

I will keep reading.  But the first lesson of this book, which I have read in numerous other books with a number of confirming stories is this:  company leaders/companies would really like to ignore the coming deluge of bad news. And so they do – until they can not escape the day of reckoning any longer…

If only we could learn to pay attention to the gathering clouds so much earlier!



After I posted this, a quote kept circling around in my head.  I decided to include it.  It is from the sermon by Arthur John Gossip, the great Scottish preacher:  But When Life Tumbles In, What Then.  (read the full sermon here).  It was the first sermon he preached after the unexpected death of his wife (1927).  Here is the quote:

For there is no supposing in the matter. To a certainty to you too, in your turn, some day, these things must come.

In other words, there is no escape.  The day of reckoning will come.  Avoid as many such days as possible, but… be prepared,  respond well/wisely/quickly when it does come.

Good counsel, for business, and for life.