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Opinion

A tale of two Stans

There is only one, real story this week. The resounding defeat of the Republicans in the US mid-term elections. My former Oxford classmate, David Rose, called me last Wednesday morning. “I feel I contributed to the Democrats’ victory,” he purred. David, a journalist for Vanity Fair, had interviewed some of the leading neocons for the magazine.

Originally scheduled to be published on December 6, the story, ‘Neo Culpa’, was dynamite, so the magazine rushed a summary on to its website the weekend before the elections. The so-called “architects of the Iraq war” turned on president Bush with the venom of women scorned. Richard Perle, a former chairman of the Pentagon’s Defence Policy Board Advisory Committee, is quoted as saying: “The decisions did not get made that should have been made... At the end of the day, you have to hold the president responsible.” It was 8 o’clock in the morning, and I was befuddled by jet-lag – think Pete Doherty on a bad, or George W. Bush on a good, day. Nevertheless, I congratulated David and put down the phone in thoughtful mood.

Warm Stan

I had flown from Chicago to London at the weekend. The queues to pass through security were lengthy and chaotic. I was reminded of a refugee camp: mothers with wailing children, the infirm, the elderly, half-clad businessmen not looking very business-like and your columnist shuffled forward at a snail’s pace. It may be unfair but I blame Bush for this disorder: if he had not invaded Iraq, Americans would have less to fear. Although a Republican friend always insists: “We were attacked first on September 11.”

As I approached the security machine, an obese woman (we’re talking three-seatbelts obese) was yelling at the crowd: “Take off your coats. Take off your jackets. Take off your shoes.” I withdrew into a self-protective hypnotic trance.

At least with hindsight, that’s what I assume must have happened.

When I emerged from security, my hold-all had been confiscated by a handsome, Barack Obama look-alike, security guard. He beckoned me over and asked: “Do you travel a lot?” “I suppose I do,” I replied. “Well you should know better,” said Stanley (for that, I noted, was the name on his badge). “You always have to take your laptop out of the container.” He proceeded to explain what a terrorist could do with a laptop and how lucky I was that he was not going to report me to his supervisor.

His words were cold but his eyes were warm. It was then I totally lost my senses and blurted: “Stanley, you are a very good-looking young man. Do you have a wife or a girlfriend?” The cacophony of the airport seemed to still. It crossed my mind that I might be imprisoned for flirting with a federal official in the course of his duty. Stanley threw back his head and roared with laughter. “Just a minute,” he said, turning away. He handed me back my bag and a piece of card with his email address and phone number. What if I had been a terrorist?

Cool Stan

It was a week full of Stanleys. What is the collective form I wonder? A brace of Stanleys perhaps? A stable of Stanleys? Last Wednesday, I went to the London Business School where Stan O’Neal, Merrill Lynch’s chairman and chief executive, was addressing students on the role of capitalism as a force for change. O’Neal is impressive. At the end of Stan’s speech, I rose to ask him a question. The dean, Laura Tyson, suggested that I say a little bit about myself, so I mentioned that I was an alumnus both of LBS and Merrill Lynch and that I was now a columnist for Euromoney. “That’s some resume you have there,” Stan said, smiling ruefully.

Stan O’Neal, Merrill Lynch’s chairman and chief executive “Stan O’Neal is the only Wall Street CEO who has hands-on experience of making something. That gives him a sort of rock-star quality with many of the CEOs we have as clients.”

Two weeks ago, I discussed the concept of classiness. An essential ingredient, I argued, was humility. And Stan’s remark to me epitomizes classiness. Mr O’Neal’s own resume is remarkable. In fact, remarkable squared. He grew up in rural Alabama, in a village called Wedowee (population 750). His grandfather was a former slave. Stan’s first job was picking corn and cotton on his grandfather’s farm. Stan was the first member of his family to finish college; he attended the General Motors Institute, later Kettering University. He studied engineering and industrial administration while working in the local General Motors plant. He rose to become a foreman on the graveyard shift, before winning a scholarship to Harvard Business School. O’Neal joined Merrill Lynch as a vice-president in the leveraged finance division in 1986. An insider argues: “The rags to riches story is all very well. But the most important thing about the assembly line experience is that it makes Stan the only Wall Street CEO who has hands-on experience of making something. That gives him a sort of rock-star quality with many of the CEOs we have as clients.”

O’Neal has talked openly of the discrimination he has encountered: “No obstacles have been as great in my life as when I started out and was told that I couldn’t go to certain stores, I couldn’t go sit in certain places in the theatre, I couldn’t drink out of certain water fountains... There is nothing in my life that has compared to the feelings of being a young child with no money, in that kind of environment and being on the wrong side of the colour line.” O’Neal has come a long way from the young boy who felt excluded from the good things. Last year, he earned over $35 million. Around 55,000 people work for him. And Merrill’s share price has doubled since he was appointed chief executive in December 2002.

However, there are very few Stan O’Neals. It takes extraordinary drive to overcome poverty, entrenched racism and then soar to the top. In America, according to a recent copy of The Economist: “Several new studies show parental income to be a much better predictor of whether someone will be rich or poor in America than in Canada or much of Europe. The one truly continuous trend over the past 25 years has been towards greater concentration of income at the very top.” As I said earlier, this week’s big story is about American politics. Am I the only person who regrets that O’Neal’s talent and tenacity are largely confined to the business arena? What do you think?

More champagne?

A whiff of fin de siecle hovers in the air, and I am perturbed. The background chatter is all about record prices for art, crazy prices for London property, booming stock-markets and the expectation of bumper bonuses for bankers. Couple these factors with the pervasiveness of debt, debt, glorious debt – in both the business and consumer sector – and you have an explosive brew.

A senior banker told me that today's tidal wave of private equity deals reminds him of the leveraged buy-out boom in the late 1980s before the junk bond market turned putrid and Drexel Burnham Lambert filed for bankruptcy. The only thing we know is that, however the bubble bursts (and burst it will), very few people will see it coming. Remember how Wall Street was the biggest cheer-leader for tech stocks in 2000? But hey, for now let’s open another bottle of real bubbles: Krug.

Next week: Things that upset me. Please send news and views to: abigail@euromoney.com

See more from Abigail Hofman

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