Career
In 1987, then Secretary of the Treasury Nicholas F. Brady asked Mullins to run the Brady commission. The commission was to be an inquiry into the stock market crash of October 19, 1987, known as Black Monday. In two months, Mullins assembled nearly 50 people to produce the report, which provided one of the first official records of the crash. The Brady Report laid significant blame on derivatives traders and portfolio insurance mechanisms, with much of the focus being generated by Mullins.
As the savings and loan crisis deepened, Brady turned to Mullins, now assistant Secretary of the Treasury, to develop a plan to resolve the crisis. The plan was enacted by Congress on August 8, 1989 as FIRREA (The Financial Institutions Reform Recovery and Enforcement Act of 1989) which created the RTC to dispose of failed thrift assets. The RTC ultimately sold $394 billion in assets of 747 failed thrifts. This approach became a model for banking resolution plans in Sweden, Thailand and elsewhere. Mullins remained popular with Congress and the president. In 1989, Mullins was appointed by President Bush as assistant Secretary of the Treasury for domestic finance. While at the Treasury, Mullins co-wrote a paper on high-yield debt defaults which received the inaugural Smith Breeden Prize.
On May 21, 1990, Bush nominated Mullins to a 4 year term on the Federal Reserve Board of Governors to fill a vacancy left by the resignation of H. Robert Heller. Mullins was seen as the Fed's "resident intellectual" due to his background as a professor in finance. In 1994, Mullins resigned to join John Meriwether's new hedge fund, Long Term Capital Management (LTCM). Although his term was to come to a close, the resignation was viewed as unexpected.
At LTCM, Mullins joined what Business Week termed a "dream team" or financial experts and academics, including Nobel laureates Myron Scholes and Robert C. Merton. Roger Lowenstein, author of When Genius Failed: The Rise and Fall of Long-Term Capital Management, argued that some prospective investors in LTCM were swayed by the presence of Mullins. Just as the celebrity of Scholes and Merton caused investors and trading partners to exercise less diligence, Mullins' addition as a "marquee" name added gravitas to the firm. Following that fund's collapse in 1998 and dissolution in 2000, Mullins left LTCM and worked for financial services companies. Mullins' career in government was effectively ended by the collapse. In 2008 he was chief economist of the hedge fund Vega Asset Management.
Read more about this topic: David W. Mullins, Jr.
Famous quotes containing the word career:
“He was at a starting point which makes many a man’s career a fine subject for betting, if there were any gentlemen given to that amusement who could appreciate the complicated probabilities of an arduous purpose, with all the possible thwartings and furtherings of circumstance, all the niceties of inward balance, by which a man swings and makes his point or else is carried headlong.”
—George Eliot [Mary Ann (or Marian)
“In time your relatives will come to accept the idea that a career is as important to you as your family. Of course, in time the polar ice cap will melt.”
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