WEBVTT - John Mack 0:00:02.800 --> 0:00:05.040 In recent decades, one of the most important figures in 0:00:05.080 --> 0:00:08.000 Wall Street has been John mac He led Morgan Stanley 0:00:08.000 --> 0:00:10.000 for many years and led it through the financial crisis 0:00:10.000 --> 0:00:12.880 of two thousand seven two thousand eight. John rose from 0:00:12.880 --> 0:00:15.960 modest circumstances in North Carolina to become a dominant figure 0:00:15.960 --> 0:00:18.439 in Wall Street for quite some time. I sat down 0:00:18.440 --> 0:00:21.200 with John recently discussed his life story and also what 0:00:21.280 --> 0:00:23.960 he sees as the future of Wall Street. So you 0:00:24.079 --> 0:00:27.280 spent more than fifty years on Wall Street, and probably 0:00:27.280 --> 0:00:30.360 the most difficult time was during this two thousand seven 0:00:30.400 --> 0:00:34.000 two thousand eight procession where Morgan Stanley came close to 0:00:34.040 --> 0:00:36.880 going under. Was that the most difficult time of your career, 0:00:37.240 --> 0:00:39.159 No question about it. I mean we were on the 0:00:39.200 --> 0:00:41.600 brink of going out of business, and you thought you 0:00:41.640 --> 0:00:43.599 had a good cash reserve for a while, but then 0:00:43.600 --> 0:00:46.080 all of a sudden people started pulling cash out, your 0:00:46.080 --> 0:00:49.320 cash reserves went down. How close did you come to 0:00:49.320 --> 0:00:54.000 actually going bankrupt? Well, we were very close, David, to 0:00:54.040 --> 0:00:57.400 the point that Tim Geitner it Fed was trying to 0:00:57.400 --> 0:01:01.160 get us to sell to Jamie Diamond It's time, and 0:01:01.200 --> 0:01:03.480 he kept saying, that's what I want you to do. 0:01:04.080 --> 0:01:06.640 So I called Jamie and I said, look, Guitner's all 0:01:06.680 --> 0:01:09.199 over me. He says, you will, you will buy the firm. 0:01:09.240 --> 0:01:11.480 He said, I don't want your firm. I said, well 0:01:11.480 --> 0:01:14.360 go tell Geitner that and he said, John, if you 0:01:14.440 --> 0:01:16.000 forced me to do it, I wouldn't pay you two 0:01:16.040 --> 0:01:19.880 dollars a share. So that that made it easy on me. 0:01:20.000 --> 0:01:22.759 I was not going to listen to them, and UH 0:01:22.840 --> 0:01:26.720 as a result, we called our board in and we're 0:01:26.760 --> 0:01:29.160 thinking we're going to go out of business. At one point, 0:01:29.200 --> 0:01:31.320 you're on a phone call with Ben Bernaki, the chairman 0:01:31.319 --> 0:01:34.080 of the FED, um Hank Paulson, Secretary of Treasure, and 0:01:34.080 --> 0:01:35.800 Tim Geitner, the head of the New York Fed, and 0:01:35.840 --> 0:01:38.759 they say you should file for bankruptcy and you slammed 0:01:38.760 --> 0:01:40.880 the phone down on them. Was that easy to do 0:01:41.880 --> 0:01:44.959 for me? It was easy to do. I mean, thank god, 0:01:45.000 --> 0:01:47.640 I left out some four letter words. I said, I'll 0:01:47.640 --> 0:01:50.880 take the firm down first, and I hung up on him. Okay, 0:01:51.000 --> 0:01:53.320 I can't tell you why I did it, cause my 0:01:53.400 --> 0:01:56.120 gut it was the wrong thing to do. So now, 0:01:56.240 --> 0:02:00.160 after your retirement, you decided to write a book. It's 0:02:00.160 --> 0:02:02.360 a very good book. I've read closet and all in 0:02:02.880 --> 0:02:04.920 about your life story. So how hard is it to 0:02:04.960 --> 0:02:07.120 sit down and write about your life and go through 0:02:07.160 --> 0:02:08.960 the good and the bad things that take you along 0:02:09.000 --> 0:02:10.800 with a long time to do this. And do you 0:02:10.840 --> 0:02:13.679 ever say why did I agree to do this? No? No, 0:02:14.000 --> 0:02:16.760 I enjoyed sitting down and working with the person who 0:02:16.760 --> 0:02:19.160 worked in me on the book. Look, I have a 0:02:19.160 --> 0:02:21.840 lot of memories, a lot of things that I did 0:02:21.880 --> 0:02:25.680 that that in talking with him, it came up of 0:02:25.800 --> 0:02:29.040 other things that I had done. So I enjoyed it. 0:02:29.040 --> 0:02:32.600 It was I got along really well my writer, and 0:02:33.600 --> 0:02:36.760 Linda Coleman was just terrific and we had fun doing it. 0:02:36.840 --> 0:02:39.040 So I enjoyed doing the book. So at the end 0:02:39.080 --> 0:02:41.720 of the book, you say something that I found to 0:02:41.760 --> 0:02:44.800 be surprising. You talked about the fact that you've recently 0:02:44.800 --> 0:02:48.360 been diagnosed with some cognitive impairment, which you say could 0:02:48.400 --> 0:02:51.280 lead to Alzheimer's, And um, why did you put that 0:02:51.320 --> 0:02:53.280 in the book? You didn't need to put that in. No, 0:02:53.400 --> 0:02:57.000 I didn't. Christie and I talked about it and she said, look, John, 0:02:57.040 --> 0:03:00.840 you're always up front with people. Uh, you're in this book. 0:03:01.720 --> 0:03:04.360 Tell people the truth, tell them you're having some issues. 0:03:04.840 --> 0:03:06.600 So we talked about it, and I agree it's the 0:03:06.680 --> 0:03:08.760 right thing to do. I mean, I didn't put it 0:03:08.800 --> 0:03:10.920 in there for sympathy. I didn't put it in there 0:03:11.480 --> 0:03:13.520 for you know, come over and give me a hug. 0:03:14.000 --> 0:03:18.239 I just think my personality has been upfront. I tell 0:03:18.280 --> 0:03:20.799 people what's going on. I did that when I ran 0:03:20.880 --> 0:03:23.160 Morgan Stanley. I did it at Credit Sweez, even though 0:03:23.200 --> 0:03:25.040 the Swiss didn't like me very much for doing it. 0:03:25.120 --> 0:03:27.680 I did it at Credit Sweez. That's who I am. 0:03:27.840 --> 0:03:31.480 I'm up front. I tell people what's going on. Look, 0:03:31.480 --> 0:03:34.400 it happens. You say that maybe you thought it came 0:03:34.480 --> 0:03:37.320 from your football Injries, or maybe you fell off in 0:03:37.400 --> 0:03:41.040 a t v um. But in hindsight, is it more 0:03:41.080 --> 0:03:42.840 of a genetic kind of thing? Do you think? Or 0:03:42.920 --> 0:03:45.040 the doctors don't really know? Well, the doctors don't know 0:03:45.040 --> 0:03:48.600 it's genetic. I mean, my mother did have Alzheimer's. I 0:03:49.000 --> 0:03:55.040 just think you need information. Look, I hope my contitive 0:03:55.080 --> 0:03:58.600 skills last a long time. But life's life and just 0:03:58.760 --> 0:04:03.600 live it. And I don't. I don't think trying to 0:04:03.720 --> 0:04:07.240 hide things. You know, if you are, if you and 0:04:07.320 --> 0:04:09.160 I didn't know each other like we know each other 0:04:09.240 --> 0:04:11.560 we go out to dinner. I don't want you to say, John, 0:04:11.920 --> 0:04:14.720 you just told me that three minutes ago. I want 0:04:14.760 --> 0:04:17.160 to put a little warning out there, you know, give 0:04:17.240 --> 0:04:20.280 me a break. I may repeat myself and and I 0:04:20.360 --> 0:04:23.480 cover myself by saying I may have already told you this. Now. 0:04:23.560 --> 0:04:26.360 Christie is your wife of more than fifty years as 0:04:26.360 --> 0:04:32.640 well years. Okay, so where did you meet her? I 0:04:32.720 --> 0:04:35.760 met her through Charlie Rose. So Charlie Rose and I 0:04:35.800 --> 0:04:38.200 were at Duke University. He was a couple of years 0:04:38.200 --> 0:04:41.039 ahead of me, and he had moved to New York 0:04:41.440 --> 0:04:43.520 and I was in New York working at Smith Barney 0:04:43.560 --> 0:04:46.160 at the time, and he called me up and said, 0:04:46.279 --> 0:04:48.920 you know, my wife's sister is coming up. We'd like 0:04:48.960 --> 0:04:51.360 you to, you know, take her out. I thought about 0:04:51.400 --> 0:04:53.440 it a little bit and got a date for Friday 0:04:53.520 --> 0:04:55.680 night and calling it back and said, okay, we'll go 0:04:55.720 --> 0:04:58.520 out Saturday night. And uh. I got up to their 0:04:58.560 --> 0:05:03.719 apartment on uh. Mary was a beautiful woman and Christie 0:05:03.839 --> 0:05:06.880 walked in. She took my breath away. Not only beautiful, 0:05:07.200 --> 0:05:10.360 but had a great smile. She was very warm, very friendly. 0:05:11.160 --> 0:05:14.000 If it wasn't love at first sight, it was pretty close. 0:05:14.279 --> 0:05:17.479 Let's talk about your background. So you grew up in 0:05:17.520 --> 0:05:21.839 North Carolina, but your grandfather immigrated from Lebanon, is right. 0:05:22.040 --> 0:05:23.680 But why did he go to the North Carolina? Was 0:05:23.680 --> 0:05:25.800 her big Lebanese community there or did he intend to 0:05:25.839 --> 0:05:29.480 go to another place? There was a big Lebanese community 0:05:29.640 --> 0:05:33.719 in the South Carolina, and uh, he was going to 0:05:33.760 --> 0:05:36.240 go to Marry in South Carolina when he got off 0:05:37.040 --> 0:05:41.400 Ellis Island and he ended up in Merryon, North Carolina. 0:05:41.760 --> 0:05:44.320 He stayed the night in the train depot. No one 0:05:44.400 --> 0:05:47.640 came to pick him up. So finally a conductors said 0:05:47.640 --> 0:05:49.560 get on and pulled him on the train and took 0:05:49.640 --> 0:05:53.120 him to Charlotte, North Carolina on that that train. And 0:05:53.160 --> 0:05:56.040 there was a Arabic family around a coffee shop at 0:05:56.040 --> 0:05:59.480 the train station, and they talked about the mix up. 0:06:00.040 --> 0:06:02.480 They gave a job. He started washing dishes. Then he 0:06:02.560 --> 0:06:04.960 became a peddler. Then he went back and got the 0:06:05.000 --> 0:06:08.160 rest of his family and they had made enough money 0:06:08.160 --> 0:06:11.360 to get a wagon and they went in the countryside 0:06:11.400 --> 0:06:16.840 selling cloth, uh you know, sewing materials, shoes, stuff like that. 0:06:17.600 --> 0:06:21.320 And then that evolved into John mckinson's. John mack was 0:06:21.400 --> 0:06:25.080 my grandfather's name, and it was a clothing department store. 0:06:25.720 --> 0:06:29.200 And my father, who was an entrepreneur, decided he wanted 0:06:29.240 --> 0:06:31.560 to be totally on his own and he started a 0:06:31.560 --> 0:06:34.400 wholesale grocery business. And so they wanted you to go 0:06:34.400 --> 0:06:36.880 on that business at some point. I don't think my 0:06:36.960 --> 0:06:40.200 father did. Uh. My mother was a very strong force. 0:06:40.279 --> 0:06:43.520 She only wanted to be a doctor, and uh, I 0:06:43.560 --> 0:06:46.080 really didn't want to be a doctor. My father was 0:06:46.240 --> 0:06:49.680 laid back and my mother was really aggressive. It was 0:06:49.720 --> 0:06:53.440 a great combination. So you were a high school football star. Well, 0:06:53.440 --> 0:06:54.520 I don't know about a star, but I was a 0:06:54.520 --> 0:06:57.920 good football You're all state, all right, I'll state you've 0:06:57.960 --> 0:07:00.440 done your homework. Okay, so all state. So you get 0:07:00.440 --> 0:07:03.760 a scholarship at Duke University to play football, and what 0:07:03.839 --> 0:07:06.000 happened to your career at Duke? Well, I thought it 0:07:06.040 --> 0:07:07.880 was a good football players I got to do if 0:07:07.920 --> 0:07:11.360 they have some great players. And uh then in my 0:07:11.880 --> 0:07:14.040 sophomore year, I was a red shirt for one year. 0:07:14.800 --> 0:07:17.360 Then I was on like the second team, but I 0:07:17.480 --> 0:07:20.960 broke c six in my neck. I cracked it. And 0:07:21.040 --> 0:07:24.440 what happened every time I would tackle someone my left 0:07:24.560 --> 0:07:28.040 arm inside I would go dead. So Frank Bassett, who's 0:07:28.080 --> 0:07:30.240 one of the orthopedic surgeons who used to be at Duke, 0:07:31.000 --> 0:07:33.440 called the a D and said, this young man's football 0:07:33.480 --> 0:07:36.680 career is over. He has a bona fide injury. He 0:07:36.720 --> 0:07:41.640 cannot play football any longer. So that ended my football career. 0:07:41.680 --> 0:07:45.160 But once you're on scholarship, I still had to work there. 0:07:45.240 --> 0:07:48.400 So I was a manager, you know, getting towels and 0:07:48.600 --> 0:07:51.720 setting up trips when I go play. Uh, you know, 0:07:51.800 --> 0:07:53.920 one of the teams in Florida, one of the teams 0:07:54.080 --> 0:07:57.440 in the Big Ten. So when you graduated, did you say, 0:07:57.480 --> 0:07:58.840 I want to go to Wall Street and be the 0:07:58.840 --> 0:08:04.280 CEO of Morgan Stanley. Now when I graduated, um, I 0:08:04.320 --> 0:08:08.840 need one course to finish Duke University. My scholarship had expired. 0:08:09.480 --> 0:08:12.840 So I got a job in a local brokerage firm 0:08:12.960 --> 0:08:16.000 called First Securities in North Carolina. So that got me 0:08:16.080 --> 0:08:19.280 involved in the securities business. And there was a lady 0:08:19.280 --> 0:08:23.000 there named Fanny Mitchell, and maybe you remember she ran 0:08:23.080 --> 0:08:26.680 the job placement office at Duke University. So when the 0:08:26.720 --> 0:08:29.720 recruiters would come down, she would say, there's one guy 0:08:29.760 --> 0:08:32.520 you gotta meet is John Mack. And I would meet 0:08:32.960 --> 0:08:36.040 these recruiters and got a number of job offers, and 0:08:36.080 --> 0:08:39.880 then I decided I like the securities business. Smith Barney 0:08:39.920 --> 0:08:42.280 wanted to open an opposite at that time in Atlanta. 0:08:43.000 --> 0:08:44.920 They offered me a job and I took it. She 0:08:44.960 --> 0:08:46.800 went to Smith Barney. What did you do there where 0:08:46.800 --> 0:08:51.439 you're like a registered investments exactly? I mean we started 0:08:51.480 --> 0:08:53.959 out in a training class and I got my brokerage license, 0:08:54.000 --> 0:08:56.320 and then I was approached by the head of the 0:08:56.400 --> 0:08:59.920 municipal bond division, why don't you come into the bond business. 0:09:00.520 --> 0:09:02.520 And I really didn't want to go down to open 0:09:02.559 --> 0:09:04.800 an office in Atlanta. Are down in Florida, so I 0:09:04.840 --> 0:09:07.640 took that job. So I got in the bond business 0:09:07.760 --> 0:09:09.760 and I was a trader on the bond desk of 0:09:09.800 --> 0:09:14.240 the minicipals. And then at some point that led Smith 0:09:14.280 --> 0:09:17.120 Barney of getting into the corporate bond market, and I 0:09:17.200 --> 0:09:21.840 transitioned over to corporate bonds. And then from there they 0:09:21.880 --> 0:09:23.840 told me they would put me on commission, which they 0:09:23.880 --> 0:09:26.920 never did, and I got approached by a small boutique 0:09:26.920 --> 0:09:30.320 firm called Smithers, which was really known for their bond 0:09:30.360 --> 0:09:33.440 acumen and their bond business. So I went over and 0:09:33.440 --> 0:09:37.760 became a salesman doing corporate securities corporate bonds at Smithers 0:09:37.760 --> 0:09:39.960 and Company. I've often thought to be a good trader, 0:09:40.000 --> 0:09:41.920 you have to be pretty quick in your head with 0:09:42.000 --> 0:09:43.960 numbers to make sure you get the numbers right. Is 0:09:44.000 --> 0:09:46.160 that true? Where you really know that that is true? 0:09:46.200 --> 0:09:49.400 But I think as a salesman much more so than 0:09:49.440 --> 0:09:54.400 a than a trader, that business, it's a commodity business 0:09:54.400 --> 0:09:57.800 about relationships. So if you can build a relationship with 0:09:57.840 --> 0:10:00.520 your clients where they trust you and they go to 0:10:00.600 --> 0:10:03.559 you when they have business to do, that's how you 0:10:03.640 --> 0:10:06.640 become successful. Okay, So how did Morgan Stanley hear of 0:10:06.720 --> 0:10:09.320 you and say you should join what was then considered 0:10:09.360 --> 0:10:11.800 a white shoe firm? And the question, probably I hadn't 0:10:11.840 --> 0:10:15.560 hired a lot of Lebanese back traders before it, right, 0:10:16.120 --> 0:10:18.920 But it's a good story. So I met with Dick Fisher, 0:10:19.800 --> 0:10:24.319 who was running that initiative to build a secondary bond business, 0:10:25.000 --> 0:10:26.760 and we went back and forth and I said, Dick, 0:10:27.080 --> 0:10:30.920 I'm flattered that you would all your job, but I 0:10:30.920 --> 0:10:35.959 don't believe a Lebanese heritage from North Carolina who went 0:10:36.000 --> 0:10:39.160 to Duke University has a chance it been making it 0:10:39.240 --> 0:10:42.880 Morgan Stanley, and he said, well, you're wrong, and if 0:10:42.960 --> 0:10:47.360 you think you come over here and you're right, when 0:10:47.360 --> 0:10:50.720 you quit, I will resign. I'm telling you you're wrong. 0:10:51.120 --> 0:10:54.000 This is a meritocracy and you should join us. He 0:10:54.080 --> 0:10:56.640 convinced me. So in those days, Morgan Stanley was a 0:10:56.640 --> 0:10:59.839 private partnership, not a public companty, and it was a 0:11:00.000 --> 0:11:03.200 company that basically underwrote let's say a T and T bonds, 0:11:03.200 --> 0:11:06.120 but it didn't actually go out and sell them, price them, 0:11:06.200 --> 0:11:09.680 and other people would sell them. So Morgan Stanley said, 0:11:09.679 --> 0:11:11.959 we're now going to change that, and you became a 0:11:12.000 --> 0:11:15.280 trader for Morgan Stanley, became a salesman at Morgan Stanley. 0:11:15.480 --> 0:11:17.200 That's what they need. So you did that for a 0:11:17.200 --> 0:11:19.360 while and then at some point people give you more 0:11:19.400 --> 0:11:21.920 authority and you get to be in management. Did you 0:11:21.960 --> 0:11:23.480 want to be in management or did you like to 0:11:23.520 --> 0:11:28.560 be a trader or salesman? I like success, so I 0:11:28.600 --> 0:11:31.800 thought the right way to go is managing being a manager, 0:11:31.800 --> 0:11:34.680 and that's what I wanted to do. And whether there's 0:11:34.720 --> 0:11:37.240 a lot of disagreement, were any good or not very good? 0:11:37.800 --> 0:11:39.280 I liked it and I thought I was pretty good 0:11:39.320 --> 0:11:41.679 at it. So you rose up and you ultimately are 0:11:41.720 --> 0:11:46.840 offered the position of being the CEO of Morgan Stanley. Well, yeah, eventually, 0:11:47.080 --> 0:11:49.760 but there were there were a lot of blocks along 0:11:49.800 --> 0:11:51.320 the way to do that. But then all of a 0:11:51.320 --> 0:11:55.160 sudden you decided you needed to do a merger with 0:11:55.600 --> 0:11:59.679 Dean Witter. And why did you need to do that? Well, uh, 0:12:00.360 --> 0:12:04.160 Dean Witter was owned by Sears and they had decided 0:12:04.200 --> 0:12:07.920 to spin it off, and we had Morgan Stanley got 0:12:08.000 --> 0:12:12.920 the order from Sears to do this, this transaction to 0:12:13.000 --> 0:12:17.880 raise money and an equity transaction. So when we met 0:12:17.960 --> 0:12:22.160 with Phil Purcell and talked about all their salesmen, their 0:12:22.200 --> 0:12:26.440 branch offices, it became apparent to me and also to 0:12:26.520 --> 0:12:29.280 Dick Fisher, that this is the way to really build 0:12:29.320 --> 0:12:32.960 a franchise because distribution is going to be more and 0:12:33.000 --> 0:12:37.200 more important and to have a connection with retail clients 0:12:37.240 --> 0:12:40.079 would be important. And that's how we made the decision. 0:12:40.120 --> 0:12:43.360 There was pushedback in the firm, but with Parker Gilbert 0:12:43.400 --> 0:12:46.600 and Dick Fisher's leadership, we were able to convince the 0:12:46.640 --> 0:12:48.720 partners this is the right thing to do, and we 0:12:48.760 --> 0:12:51.280 did it. Your firm was a leading Wall Street firm. 0:12:51.280 --> 0:12:53.600 You could argue Dean Winter was a so called main 0:12:53.640 --> 0:12:56.600 street firm and putting the true together, I've never been 0:12:56.640 --> 0:13:00.360 done like that before. And how did you know negotiate 0:13:00.400 --> 0:13:02.840 who was going to be the CEO? Well, at that time, 0:13:03.440 --> 0:13:07.800 Dean Winter owned Discover Card, so their market cap was 0:13:07.920 --> 0:13:11.679 dramatically larger than ours. So we based it on market 0:13:11.720 --> 0:13:14.560 cap and they had a much larger market cap. To 0:13:14.600 --> 0:13:18.480 do the deal, Purcell wanted to be in charge. That 0:13:18.640 --> 0:13:21.000 was one of the prerequisites to do the deal, that 0:13:21.000 --> 0:13:24.080 he'd be the CEO and I'd be the president of firm. 0:13:24.160 --> 0:13:26.280 And we did that deal. All right. She did that deal, 0:13:26.440 --> 0:13:29.640 and being president under somebody else was a step back. 0:13:29.679 --> 0:13:32.079 You could argue, though it's a bigger firm. How long 0:13:32.080 --> 0:13:35.400 did that last? Uh, hey, that's a good question. I 0:13:35.400 --> 0:13:39.280 know it didn't last too long. Ultimately you said I've 0:13:39.280 --> 0:13:41.720 had enough of this and you didn't like his style, 0:13:41.800 --> 0:13:44.079 and you write about that in your book. But you 0:13:44.200 --> 0:13:47.599 ultimately said, okay, I'm out of here and so unemployed, 0:13:48.200 --> 0:13:51.280 and you tell your wife, guess what, your husband's unemployed 0:13:52.000 --> 0:13:56.080 right now. My wife is so supportive. I could have 0:13:56.080 --> 0:13:58.480 told her anything and she would. She's on my side. 0:13:58.520 --> 0:14:01.600 It was great you know, I ended up at one 0:14:01.640 --> 0:14:04.199 point kind of going to a hedge fund and work 0:14:04.280 --> 0:14:06.480 with Art Sandberg, and I did that for a while, 0:14:07.400 --> 0:14:11.440 but I was really flexible. And I think they call 0:14:11.520 --> 0:14:16.040 them the grumpy old men who went after the existing 0:14:16.080 --> 0:14:19.640 management at Morgan Stanley and felt like they were losing 0:14:19.680 --> 0:14:23.640 their edge and also their reputation as a really great 0:14:23.720 --> 0:14:27.360 investment bank and really led by Parker Gilbert and Louis 0:14:27.360 --> 0:14:30.360 Bernard and some of the senior partners who had retired 0:14:30.480 --> 0:14:32.800 and they owned a lot of stock, and they put 0:14:32.800 --> 0:14:37.360 a lot of pressure on Dean word or Morgan Stanley 0:14:37.440 --> 0:14:39.240 to make a change. And that's how I ended up 0:14:39.240 --> 0:14:43.120 going back. So Phil Purcel was austed and then they 0:14:43.160 --> 0:14:45.480 came to you and to your surprise, they said come 0:14:45.480 --> 0:14:47.200 back and be the CEO. You hadn't known that you 0:14:47.200 --> 0:14:49.000 were going to be asked, correct, I didn't know that 0:14:49.040 --> 0:14:50.880 at all. So what was it like when you came 0:14:50.920 --> 0:14:52.720 back to where there are people cheering for you when 0:14:52.720 --> 0:14:56.600 you came back into Morgan Stanley. You've seen the film, yes, 0:14:56.920 --> 0:15:00.000 so you've also gotten been coming very involved with an 0:15:00.040 --> 0:15:02.440 nonprofit area. I served with you on the Duke Board, 0:15:02.440 --> 0:15:05.040 as I mentioned earlier, Duke University board. But you also 0:15:05.200 --> 0:15:08.000 became involved with New York Presbyterian Hospital and became the 0:15:08.080 --> 0:15:10.920 chairman of the board. So what got you involved with 0:15:10.960 --> 0:15:14.520 that area. The previous senior part in Morgan Stanley was 0:15:14.560 --> 0:15:17.960 Bob Baldwin, who was on the hospital board. And he 0:15:18.000 --> 0:15:19.520 would come and see me and say, John, I want 0:15:19.520 --> 0:15:21.400 you to to go on the hospital board. And I said, Bob, 0:15:21.600 --> 0:15:24.440 I've been on hospital boards before. All they want some money, 0:15:24.440 --> 0:15:27.360 I just write you a check. No, I don't want that. 0:15:27.400 --> 0:15:28.840 I want you to get involved. I want you on 0:15:28.840 --> 0:15:31.880 the board. And I said, okay, Well, out of respect 0:15:31.880 --> 0:15:34.320 for you, I'll go up and meet some of the people. 0:15:35.200 --> 0:15:37.520 And Christie and I went up, had a tour of 0:15:37.520 --> 0:15:41.400 the hospital and they took us to the neo natal 0:15:41.520 --> 0:15:46.160 Care Babies uh Wing And when I walked in, I 0:15:46.200 --> 0:15:51.200 was shocked. I mean, it really looked like Frankenstein's laboratory. 0:15:51.640 --> 0:15:55.920 Everything was old. Yeah, these big yellow pipes and rubber 0:15:55.960 --> 0:15:59.680 tubes coming down. Yeah, these little infants four pounds three 0:15:59.680 --> 0:16:04.160 pounds and incovators. It kind of broke my heart and 0:16:04.200 --> 0:16:08.440 broke Christie's heart. So so we go back and uh 0:16:08.640 --> 0:16:12.240 I decided to take some of the leaders of the firm. 0:16:12.320 --> 0:16:13.720 I want you to come up, I want you to 0:16:13.760 --> 0:16:15.720 see the neo natal care. I want you to meet 0:16:15.720 --> 0:16:18.920 some of the doctors and mirasces. So we bring them up, 0:16:18.960 --> 0:16:23.320 they see it, and then out of that, uh, people 0:16:23.320 --> 0:16:25.760 want to do something to change it. And I said, look, 0:16:26.280 --> 0:16:29.360 there's no children's hospital in New York less bill a 0:16:29.400 --> 0:16:32.800 Morgan Stanley Children's Hospital. And I think the firm put 0:16:32.800 --> 0:16:36.400 in total over time a hundred million dollars. The employees 0:16:36.520 --> 0:16:40.200 got involved in a big way, our clients got involved, 0:16:40.240 --> 0:16:43.040 and I think from a sense of philanthropy, it's one 0:16:43.080 --> 0:16:45.560 of the best things Morgan Stanley has ever done. So 0:16:45.720 --> 0:16:50.520 how did you build Morgan Stanley where you focused on underwriting, trading, 0:16:51.640 --> 0:16:54.160 other areas that were new to Wall Street. Well, I 0:16:54.200 --> 0:16:56.360 focused on what we did really well, and what we 0:16:56.440 --> 0:17:02.479 really did extremely well was bill relationships with corporations and CEOs. 0:17:03.160 --> 0:17:05.800 We were either number one or number two in the 0:17:05.880 --> 0:17:09.040 M and A tables every year, so that was very important. 0:17:09.480 --> 0:17:11.119 And then we said, look, if we're going to be 0:17:11.200 --> 0:17:14.119 doing M and A and we have these wonderful relationships 0:17:14.119 --> 0:17:17.679 and trust, let's move into the secondary market and become 0:17:17.720 --> 0:17:22.719 a very active securities business. So we ended up building 0:17:22.760 --> 0:17:28.920 a very large platform at the institutional level, and over time, UH, 0:17:29.040 --> 0:17:32.000 with Dean Winter, you had the retail, so we really 0:17:32.040 --> 0:17:36.159 focused on being an institutional firm with a very strong 0:17:36.240 --> 0:17:39.639 retail base. Your predecessor, Philip Percell, was famous for not 0:17:39.720 --> 0:17:41.600 meeting with a lot of people. He was a little isolated. 0:17:41.640 --> 0:17:44.160 Some people accused him of being You like to be 0:17:44.280 --> 0:17:46.600 in the trading floor, near the trading floor, being with 0:17:46.720 --> 0:17:48.760 the customers all the time, or with your employees. Is 0:17:48.800 --> 0:17:52.199 that right? Yes? And so if you found people that 0:17:52.240 --> 0:17:55.560 were ignoring their clients or ignoring their employees people working 0:17:55.600 --> 0:17:57.800 for you, you tended to tell them what you thought 0:17:58.040 --> 0:18:01.280 without question. What I did when I was running the 0:18:01.359 --> 0:18:05.000 division fixed income division, I would sit out on the 0:18:05.040 --> 0:18:10.879 trading floor and have I had a glass booth office 0:18:10.920 --> 0:18:12.480 so I could if I had need to have a 0:18:12.480 --> 0:18:16.160 conversation with someone, instead of going off in the conference room, 0:18:16.280 --> 0:18:18.119 we could sit in this glass office and we'd have 0:18:18.200 --> 0:18:21.520 a conversation. And Uh, I would be on the phones. 0:18:21.560 --> 0:18:24.200 I'd walk around and sit down by the best salesman 0:18:24.560 --> 0:18:27.280 or the worst salesman. What are you working on? What 0:18:27.320 --> 0:18:30.760 are your clients doing? I was always involved and I 0:18:30.840 --> 0:18:34.919 had some really fun times in doing it. Um. I 0:18:34.960 --> 0:18:38.359 think in my book I talked about how you treat people. 0:18:38.440 --> 0:18:40.960 And I get off the elevator at eight o'clock in 0:18:41.000 --> 0:18:44.800 the morning, and you look over to the right and 0:18:44.840 --> 0:18:48.040 their delivery guys bringing coffee and egg sandwiches, and where 0:18:48.040 --> 0:18:51.000 of you do for breakfast? And about twenty minutes later 0:18:51.440 --> 0:18:53.520 I walked back and I go out on the trading 0:18:53.560 --> 0:18:56.080 floor and I go up to the sky and I said, 0:18:56.960 --> 0:19:00.200 how long you been here? He said about the every 0:19:00.200 --> 0:19:03.240 minutes his hispanic, about thirty minutes. I said, if you 0:19:03.280 --> 0:19:06.000 call the person to order breakfast, He said, yes, I've 0:19:06.000 --> 0:19:08.440 called it three times. I said, give me the number. 0:19:09.280 --> 0:19:11.040 So I gave it the number, and I said, this 0:19:11.080 --> 0:19:12.600 is John mac I want you to get your ass 0:19:12.600 --> 0:19:15.800 out here. And he comes out in front of the 0:19:15.800 --> 0:19:19.240 Philly and I said, look, we're no better than he is. 0:19:19.280 --> 0:19:21.400 He's just trying to make a living. When you make 0:19:21.480 --> 0:19:24.000 him wait, you take money out of his pocket. If 0:19:24.040 --> 0:19:27.360 I ever hear about it again, you're fired. That went 0:19:27.400 --> 0:19:31.240 around the floor like that. You don't treat people that way. 0:19:31.440 --> 0:19:34.800 And I hope that's ingrained in me before I went 0:19:34.840 --> 0:19:37.879 to Morgan Stanley. But I really learned it from Dick Fisher. 0:19:38.359 --> 0:19:41.600 He was such a gentleman and very smart and made decisions. 0:19:41.760 --> 0:19:45.040 So the person that you almost fired, did he do 0:19:45.200 --> 0:19:48.000 that again or he didn't do it again. No one 0:19:48.040 --> 0:19:50.800 did it again. So Morgan Stanley was doing quite well, 0:19:50.920 --> 0:19:54.240 and Morgan Stanley is competing principally with Goldman Sacks. I 0:19:54.240 --> 0:19:57.560 guess was your main rival. And then all of a sudden, um, 0:19:57.600 --> 0:20:00.280 we go into a recession two thousand seven, two thousand eight. 0:20:00.480 --> 0:20:03.119 So what happened was I remember from reading from that 0:20:03.160 --> 0:20:05.120 period of time and from reading your book, you had 0:20:05.160 --> 0:20:07.440 this large cash reserve and you wanted to make sure 0:20:07.440 --> 0:20:09.280 you had a lot of cash. While people were afraid 0:20:09.280 --> 0:20:11.560 of Morgan Stanley may be going under, so they said, 0:20:11.560 --> 0:20:13.919 give me my cash back. I'm gonna put it in JP. Morgan, 0:20:13.960 --> 0:20:16.040 it's exactly right. And so all of a sudden the 0:20:16.080 --> 0:20:18.639 cash is going all the way down. Right, at some 0:20:18.680 --> 0:20:20.960 point you say, maybe we're not going to make it. Yes, 0:20:21.000 --> 0:20:25.399 exactly right. Well, thank God for the Japanese is what 0:20:25.480 --> 0:20:29.640 I can say. What I learned is it goes back 0:20:29.640 --> 0:20:34.520 to when Morgan Stanley would bring uh brokers from whether 0:20:34.640 --> 0:20:37.280 the Mirror or Simu Toomo. It didn't make any difference, 0:20:37.720 --> 0:20:40.800 and they would in a training program at Morgan Stanley, 0:20:40.960 --> 0:20:45.160 and the Japanese who came through that training program respected 0:20:45.160 --> 0:20:48.199 the culture of Morgan Stanley. So when we were on 0:20:48.240 --> 0:20:51.520 the brink uh they stepped up and gave us the 0:20:51.520 --> 0:20:53.399 money to stay in business. So it turned out to 0:20:53.400 --> 0:20:55.840 be a good investment for Mitsubishi because your stock is 0:20:55.880 --> 0:20:59.000 flourished since then. And after that happened, did you think 0:20:59.040 --> 0:21:01.600