Thain, who resigned last Thursday. He had come under fire for three main sins:

• Not disclosing more quickly Merrill's $15.3 billion in losses for the fourth quarter.
• Asking for a $10 million bonus for himself.
• Paying Merrill Lynch employees $4 billion in bonuses, normally given in January, in December, before Bank of America closed on the acquisition.
• Spending $1.2 million a year ago to renovate his office and three other rooms, including an $87,000 rug and a $35,000 commode.

For each of these, Thain has an excuse.

• The world has changed. Thain told CNBC about the renovation, "It is clear to me in today's world that it was a mistake."
• My predecessor was a jerk. In the same interview, Thain said that former Merrill Lynch CEO Stan O'Neal's office "was very different than the general decor of Merrill's offices. It really would have been very difficult for me to use it in the form that it was in. … It needed to be renovated no matter what." And Thain will pay Bank of America back for the $1.2 million
• I told them everything. In a memo to Merrill employees, Thain said that Bank of America "learned about these losses when we did." On the bonuses: "The timing of the payments for both the cash and stock were all determined together with Bank of America."
• And they were okay with it. Steele Alphin, Bank of America's chief administrative officer, wrote an email, leaked to Dealbreaker, which defended Thain in early December when the question of Thain's bonus first came up:
  

  John was not asking for a $10MM bonus, but simply to be paid fairly and anything paid him paid less than Lewis, if Ken is to receive a bonus. John had already accepted that if Ken was to be at zero, he would be at zero. Or, if Ken was below $10MM, he would be significantly below $10MM. John's reputation has not been damaged with our directors or management team which now includes him.

The important thing: None of these deals with the actual substance of the complaint. Are we to believe that in January 2008, with the mortgage market in meltdown and Merrill having just reported a $9.8 billion loss, everyone would have been thrilled with Thain's renovation? The "different world" excuse, however, focuses people's minds on the terrible state of the economy. The "blame someone else" excuse makes one think about what a jerk that other guy was. And the "transparency" excuse doesn't get into whether an action was good or bad — it's just whether someone else knew about it and failed to complain about it at the time. The key takeaway: Get the people who are criticizing you to think about something else.

Thain is a master at this. He makes other captains of industry look like bumbling fools. Take Citigroup's brouhaha over a new $50 million private jet it had on order. The New York Post had spokeswoman Shannon Bell saying the bank is "exploring its options." Then came a call from a Treasury official last night. A spokesman emailed us Citi's new party line:

We have no intent to take delivery of any new aircraft.

What, not even a token "the world has changed"? Never mind that they can't get their story straight — these are lousy excuses which don't change the topic. If Thain were running Citigroup, I think he'd be brassy enough to point out that Treasury officials knew about Citi's private-jet fleet — and maybe even start asking questions about President Obama's gigantic personal jet. You know, Air Force One?

(Photo by Getty Images)

The $1.2 million Thain spent redecorating his office — with expenses like an $87,000 area rug and a $35,000 "commode with legs" — paled beside the $15 billion in losses Merrill reported for the fourth quarter. The losses were so heavy, and so unexpected, that Bank of America CEO Ken Lewis met secretly with government officials and negotiated a new infusion of cash from the government's bailout fund.

But Lewis had stood beside Thain over the credit losses; every Wall Street firm is seeing heavier losses than expected, and there was no evidence Thain knew this was coming. Why do we think the lavish office redo was what did Thain him? His personal reputation for righteousness, which had him hailed as a hero for previous gigs at the New York Stock Exchange and then Merrill Lynch, was ruined by the revelation. And with that, Thain looked like just another overvalued asset on the balance sheet.

We hope Lewis likes the rug. He paid $28 billion for it.

(Photo by Getty Images)

Thain personally authorized a $1.2 million redecorating spree a year ago, Charlie Gasparino writes in the Daily Beast, even as Merrill prepared to slash jobs and expenses. Merrill's CEO was hailed as a hero for selling the company to Bank of America for $28 billion in September, as Wall Street collapsed around him. It was sold for a bargain price, but the firm met a far better fate than Bear Stearns or Lehman Brothers. Questions about whether Merrill hid the true state of its balance sheet from Bank of America, raised after the brokerage house reported $15 billion in fourth-quarter losses, haven't unseated Thain. But the lavish details of his spending on his Merrill Lynch office could:

The other big ticket items Thain purchased include: $87,000 for an area rug in Thain's conference room and another area rug for $44,000; a "mahogany pedestal table" for $25,000; a "19th Century Credenza" in Thain's office for $68,000; a sofa for $15,000; four pairs curtains for $28,000; a pair of guest chairs for $87,000; a "George IV Desk" for $18,000; 6 wall sconces for $2,700; six chairs in his private dining room for $37,000; a mirror in his private dining room for $5,000; a chandelier in the private dining room for $13,000; fabric for a "Roman Shade" for $11,000; a "custom coffee table" for $16,000; something called a "commode on legs" for $35,000; a "Regency Chairs" for $24,000; "40 yards of farbric for wall panels," for $5,000 and a "parchment waste can" for $1,400.

The documents also show that Thain signed off on the purchases personally. "Labor to relamp the six wall sconces" cost $3,000, and Thain authorized the payment of another $30,000 to pay the expenses Smith incurred in doing the work. Thain has hired Smith—whose celebrity client list includes Steven Spielberg, Michelle Pfeiffer, Cindy Crawford and Sir Evelyn de Rothschild—to design and decorate his private residences. They include a Manhattan apartment at 740 Park Avenue, and his 10-acre mansion in Rye, NY.

The "commode on legs," in particular, is drawing ridicule on the Yahoo Finance message boards. It is the perfect metaphor how Thain has flushed his career down the toilet.

Thain, a technology executive at Goldman Sachs, was tapped to take over the New York Stock Exchange from Dick Grasso, whose $187.5 million retirement package drew outrage. His reputation for personal rectitude is what got him that job — as well as the Merrill one, where he replaced Stan O'Neal, a secretive autocrat. Take away that aura of righteousness, and what is left of Thain? Certainly no Clark Kent. He's just another Wall Street disappointment.

Photoshop via Dealbreaker)

John Paulson
A hedge-fund manager who made $3.7 billion — yes, with a b — in 2008 by betting against the subprime mortgage market and the investment banks, like Lehman Brothers, that had profited from it. No relation to Treasury Secretary Hank Paulson. (PIty. Wouldn't it be juicy if he were?)

Peter Kraus
An investment banker who worked only a few days at Merrill Lynch before Bank of America bought the troubled brokerage house, but walked away with a $25 million bonus — at a time when the government was propping up Merrill and Bank of America with a taxpayer-funded bailout. He then bought a $37 million Park Avenue apartment we dubbed "the People's Palace." At his new job as CEO of AllianceBernstein, he's due for a $6 million bonus this year and $50 million in stock over five years.

Hugh "Skip" McGee III
McGee, the head of U.S. banking for Lehman, helped negotiate the sale in bankruptcy of Lehman's U.S. operations to Barclay's the British bank. In the process, he argued the place would fall apart without him, and scored a two-year, $50 million contract, even as Lehman laid off thousands. “I’m feeling nauseous right now even thinking about McGee’s deal," one fomer Lehman banker told the Daily Beast. Update: Peter Truell, Barclays' director of corporate communication, called to say the Beast's figure was "categorically false," but wouldn't tell me what McGee's actual compensation was. Could be higher, could be lower! Anyone care to fill us in?

Nauseous, or envious? These three are clearly brilliant bankers. Anyone who could make so much money in a dissolving marketplace probably deserves outsized pay. Which is why it's so funny to see Wall Street pinstripes complaining about their success. Their only sin: reserving their skills for their own pocketbooks.

Reporters for Reuters got their hands on a memo from Credit Suisse CEO Brady Dougan and Paul Calello, head of its investment-banking arm. They wrote to 2,000 investment bankers:

While the solution we have come up with may not be ideal for everyone, we believe it strikes the appropriate balance among the interests of our employees, shareholders and regulators and helps position us well for 2009.

It's wickedly brilliant. Credit Suisse takes $5 billion in questionable assets off its books, which immediately benefits shareholders. Publicly, it looks like the bankers are being punished with the toxic junk they made a fortune selling, which satisfies regulators and a bloodthirsty public.

And in reality? The bankers are getting bonds, derivatives, and other instruments whose value has already been discounted by 35 percent — a loss borne by Credit Suisse investors. If they rebound, Credit Suisse's moneymen will end up getting more than $5 billion. But that scenario assumes that the credit markets unfreeze and housing prices recover — at which point no one will be calling for guillotines on the streets of lower Manhattan. Wall Street always finds a way.

(Photo by Founditemclothing.com)

I recently reread Den of Thieves, the tale of how federal prosecutors brought down Wall Street giants Ivan Boesky and Michael Milken, the emblems of the '80s takeover boom. It turns out that Boesky never actually said, "Greed is good," the line Michael Douglas uttered as Gordon Gekko in Wall Street.

What he actually said: "Greed is healthy."

Boesky was right, even if his conviction and jail sentence in a series of insider-trading scandals makes him a lousy spokesman for the cause. Don't think of greed as good or evil; think of it as an almost biological reality. Greed is part of the human makeup. The question is how we harness it for good.

A big problem with Wall Street is that its firms are no longer private partnerships, where bankers worried about the ongoing health of the firm. At public companies, that becomes the shareholder's problem, which led traders to take outsized risks. Hey, as long as they made their numbers and got their money!

Morgan Stanley wants to make its bonuses revocable, if a trader's profit-seeking strategies go afoul in future years. I'm not sure they have the details properly worked out — giving employees money and then taking it away might run afoul of employment laws. But it's the right kind of thinking. If we want Wall Street's avaricious crowd to think in the long term, we've got to pay them in the long term — and pay them well enough that they turn down other work. Otherwise, only really stupid people will work on Wall Street.

Many in the hometown of finance won't cry for bankers who don't get multimillion-dollar bonuses. But last I checked, they pump a lot of money into the New York economy. Sure, they've turned Manhattan into a soulless monoculture of glassy modernist condos with Starbucks in the lobby. Waaah, someone cleaned up all of the grit! You know what's worse than that? Empty glassy modernist condos with closed Starbucks that no longer offer lattes, let alone jobs with healthcare benefits.