We’re getting flooded by emails from analysts who are complaining that our earlier post taking them to task for getting this week’s earnings so dramatically wrong isn’t fair. They have to put out numbers, and are encouraged to put out numbers by both their employers, clients and the companies on which they report. In short, they’re just following orders.
But what excuses the performance on today’s Merrill conference call? More than one got on the call to challenge Merrill’s write-downs–on the basis that Merrill had gone to far. From our perspective, it sounded like a lot of analysts were attempting to defend their own inadequate calls by raising questions about Merrill’s numbers. At the very least, this is the impression we go from Citigroup’s comments.
-
Posted in:
Merrill Lynch
The Carping of The Analysts: Did Merrill’s Write-Downs Go Too Far?
By Bess LevinComments (11)
Leave a comment
You can log in with your account or comment as a guest below.
My understanding is they have to have estimates or they would also need to drop their price targets and recommendations, on the premise NASD does not allow publishing analysts to make valuation calls without any reasonable basis no?
you mean merrill had gone “too far” rather than “to”.
Carney – since the caliber of your ‘published’ work seems to provide you with such an analytical high-ground, we would all love to hear from you on the next earnings call.
The lesson is to treat equity research analysts like the ratings agencies… they’re good for giving some guidance but their estimates or ratings are no substitute for your own diligence…
First of all, ER is in many ways the backbone of the bank. You corp fin noobs, traders, prop traders, corporate brokers and salesman bother us every single effing with mindless idiotic question after question. Sure, analysts shouldn’t get shit wrong, but it happens sometimes. However, we don’t get nearly enough praise when we make a stock tumble a la Citi. Instead, we get death threats.
Take us to task – the banks analysts out there are garbage, but we’re not all bad. The head of GS TMT research has now left to become CFO of the NFL – so stop trying to put the blame on us and actually realize you wouldn’t have the foggiest idea what was going on without us.
some of my best friends are wall street bank analysts but sorry Equity Research did not make citi tumble
With all due respect, Carney, you clearly have no idea what you’re talking about. As shown by both your original and this follow up post.
Um, yeah, I guess when an analyst causes citi to drop by 7% in a day just by sending out a report means ER is not responsible. Please, we send out notes and the price moves like a mofo.
No one is saying an analyst caused Citi’s downfall, that is just stupid. That’s not the point of equity research…at all.
Anyway, the last people you should be blaming are Street analysts rather than secretive financial institutions who do their best to hide the truth.
It would indeed take someone in ER to call ER
“the backbone of the bank”. Since when is a cost center the backbone of anything?
Cramer moves stocks too. We don’t need him either.
Our job isn’t to move stocks – our job is to predict direction. And please, if you’re so smart, why don’t you stop whining and complaining and asking 10,000 stupid question that a peon is usually able to comprehend. We’re trying to analyze these stocks, meanwihile you’re stilll asking moronic valuation questions and wasting everyone’s time.