Jim Cramer?s Money Is on Moynihan for BofA Chief - 10/01/09

October 1, 2009

Jim Cramer?s Money Is on Moynihan for BofA Chief
By NYT DealBook Blog, The New York Times

Who should lead Bank of America next? It?s a question that has market watchers squabbling on the Web.

Jim Cramer (above, left), the former hedge fund manager who hosts CNBC?s ?Mad Money,? said on RealMoney.com that he is pushing for Brian Moynihan (right), BofA?s head of consumer banking, to take the reins when Kenneth D. Lewis steps down as chief executive at the end of the year. But Douglas A. Kass, a fellow RealMoney contributor and a general partner at Seabreeze Partners Management, isn?t so sure.
Mr. Cramer wrote:

When all is said and done, Bank of America must become the best consumer bank in America in order to make the acquisitions work and Moynihan?s job, his experience running consumer banking, to me makes him the odds-on favorite.

Mr. Kass followed up with this short retort: ?I will remind you that Moynihan is a lawyer, and the last lawyer to run a bank kept dancing until the music stopped!?

Here, Mr. Kass seems to be comparing Mr. Moynihan, who worked a law firm early in his career, to Charles O. Prince, the former head of Citigroup who was once Citi?s general counsel.

In July 2007, right before the credit crunch went into overdrive, Mr. Prince made this now-infamous comment: ?When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you?ve got to get up and dance. We?re still dancing.?

As it turns out, Citi danced far too long, costing the bank billions of dollars in write-downs and leaving Mr. Prince without a job.

Mr. Cramer was harshly critical of reports that BofA might consider Robert Steel, the Goldman Sachs alumnus and former chief executive of Wachovia, to fill Mr. Lewis?s post.

?It?s funny, but the papers promote outsider Bob Steel as the stalking horse because of his balance sheet experience,? Mr. Cramer wrote on RealMoney. ?But that was not Steel?s expertise at Goldman Sachs and it was certainly not his experience at Wachovia.?

?Don?t forget that, last I looked, the Securities and Exchange Commission has an open inquiry into the comments Steel made on my TV show, ?Mad Money,? about the status of Wachovia.?

His harsh assessment seems at odds with what Mr. Cramer said just a year ago on Oct. 3, 2008. At the time, Mr. Cramer seemed to be singing nothing but praise for the bank chief, going so far as to apologize to Mr. Steel for putting him on his ?Wall of Shame? amid the chaos related to the sale of Wachovia.

?Bob Steel, you are the ?Man of Steel,? not like Stalin, but like Superman,? Mr. Cramer said on Mad Money. ?Today I am telling the world I was a fool for not trusting you and a real jerk for putting you on the ?Wall of Shame,? when you deserve to be on the ?Wall of Acclaim.?

? Cyrus Sanati