But before everyone gets all hopped-up by the bold aggressiveness of this move, recall how closely Thain's plans jive with that now semiforgotten figure at Merrill, Dave Komansky. Big Dave took over Merrill in the mid-'90s after a tight, cost-cutting regime led by Dan Tully. With overseas markets booming, Komansky built his tenure on overseas expansion, buying a money management firm in Britain (Mercury Asset Management) and launching an ambitious expansion in Asia. He was applauded. Alas, it all came apart in the late '90s, after a series of chronic problems hit MAM, the Asia crisis wiped Merrill out in a Komansky fave market, Indonesia, its Japanese deals crapped out and that other big Komansky enthusiasm, Long-Term Capital Management, flamed out. By the turn of the century, Merrill was awash in problems both financial and regulatory -- notably the analyst scandals (Henry Blodget was a Merrill analyst) -- setting the stage for Stanley O'Neal to sweep into power by sweeping out Komansky's initiatives, his people, then Big Dave himself. Cheers again. O'Neal then jump-started growth at home by, among other things, barreling into mortgages. Enter Thain.
Why dwell on this dark history? Because Wall Street firms tend to move strategically in tightly circumscribed ways: get big, get little; go domestic, try international. They are, like Newtonian atoms, reactive and impatient. Thain wouldn't have as much to do right now internationally, if O'Neal hadn't cut so severely Komansky's initiatives. But while O'Neal was a little rough -- to say the least -- he was only fulfilling the desires of board and shareholders who had grown weary of Komansky's global strategy.
Of course, everything is execution and timing. But if Thain builds up a big presence overseas, say in China, and through no fault of his own, China crashes for any of a dozen good reasons, he'll find himself in the same uncomfortable position as Komansky: looking over his shoulder at someone declaring a new gospel of sticking to your knitting and cutting costs. And so it goes. - Robert Teitelman
A small 
