Business writers are happy John Thain's second act is a step down. The CEO who engineered a fire sale of Merrill Lynch to Bank of America and earned fame as the financial Nero who bought a $35,000 toilet while Wall Street burned has returned to life as the executive of CIT--a smaller, less-prestigious, more troubled firm. CIT is a lender to small businesses that went bankrupt in November, knocking out a $2.3 billion government investment. Thain is a wide-cheekboned Goldman alum who oversaw Merrill Lynch's hemorrhaging final days. Do they hold the key to one another's resurrection?

• Smart Step Toward Redemption, writes Michael Corkery at the Wall Street Journal. "In some ways, CIT may prove a savvy next act. Before it strayed into risky mortgage investments that contributed to its downfall, CIT's bread-and-butter was small business lending. If Thain can restore this business, he can not only help CIT, he can also gain brownie points in Washington, where promises to increase lending to small businesses is a campaign pledge of just about every politician."

• They Deserve Each Other  Douglas A. McIntyre of 24/7 Wall St. calls the match-up "a perfect pair." But, McIntyre"He still must deal with two important risks. The first is that he is actually free of the government's investigation of the Merrill buyout. The other is whether CIT has the capital and reputation to become a viable lending entity again."

• Big Step Down, says Yves Smith at Naked Capitalism. "Boy, is this a down-market move for former Merrill CEO John Thain." Smith teases Thain, but hopes for the best: "By all accounts, Thain was a capable executive before his career went off the rails ... Let's hope Thain can turn his career and the company around."

• Baffling Pick for CIT  Claudia Deutsch at True/Slant is shocked that CIT's board would fall for Thain's redemption act: "The fact remains, Thain was unable to save Merrill from financial implosion." Yet while she's "baffled" by CIT's pick, she says she's "not despairing" because Thain is getting $500k for his trouble--"chump change." She concludes by hoping that Thain really is interested in fixing his reputation, because then "he has every incentive to manage CIT conservatively and profitably, with an eye toward societal good. Otherwise, all he's done is failed upward. The American way."

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