All the financials are down today but taking the lead is Merrill Lynch, closing in on a ten percent decline. We want to know why. There was some talk on Friday about a report by Mffais.com that said Temasek Holding had sold its stake in MER, but the Singapore state-owned investment company told Bloomberg the story was “mischievous speculation” by a “dubious source”–a characterization with which Mffais took issue–so that can’t be it. Incidentally, though, we at DealBreaker take pride in being a dubious source that works hard to promulgate mischievous speculation so, if someone could let us know below what’s behind the drop– be it John Thain’s plan to drive the stock to a level at which his former employer would buy the dump ($1.50), the fact that Cinderella‘s busy getting ready for tonight’s ball, or SAC backing the Zamboni truck out of there– that’d be top notch. Don’t be scared about getting in trouble vis-a-vis spreading baseless rumors for your own gain; Carney’s packing several (unlicensed) firearms and will protect us all.
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Thank god all those naked short speculators are out of the market. Cause as we all know, they as well as the baseless rumor spreaders are the real problem.
Hey bess, does carney also love love double double chex chex?
“packing packing”?
Bess, lay off the bennies, woman, you’re causing a scene in the blogohedron, every webcam on the East Coast is staring.
I have no idea why Merrill is crashing…. Though I’m personally not crazy about that anti-ratcheting provision in their latest offering.
If MER is forced to sell off assets to raise capital, I am concerned that MER will not be able to get full value. Potential buyers may know the squeeze is on.
That said, I highly doubt that’s the reason behind the Merrill sell-off. That info has been available for a while.
#1 is mayo
it’s the evil shorts
Drexel Burnham Lambert is shorting them
Michael Milken is shorting them!
Merrill’s refunding needs in 2008 and 2009 are $30.2B and $35.9B, respectively.. given Lehman needs $21.6B and Morgan Stan needs $20.1B in 09′. With little/pricy funding, little return on their struggling portfolio, and the overwhelming need to delever their books, it’s no suprise they are getting hammered (and no they are not drinking it off, theyve been swimming in it for weeks, months, hmm? )
Let them have their Mayo. Merrill can spread it around all they want to.
Why hasn’t Merrill sold off its stake in BlackRock although it desperately needs to raise capital? BlackRock has been a huge cash cow for Merrill, without it, the company would be struggling even more with funding/liquidity issues. The company wouldn’t know what to do with the cash it could get from a sale… Loldonkaments for all you Greenstein fans.
# 10 you are an idiot with the Mayo comments. #5 has it right.
John Thain is shorting Merrill just to show that John Thain can do whatever the fuck John Thain wants.
since when did deal breaker become a blog for mayonnaise and the such. Bring out the Hellman’s and bring out the Best!! Ty
retail brokers shorting themselves.
-retail
i’m guessing it may be related to a hedge fund blow up. merrill is a top 3 prime broker. wouldn’t they have to start seizing assets if one of their clients couldn’t come up with a margin call?
Who gives a shit about Merrill. Eating warm Mayo, now that is a real problem!
When the only source of liquidity is the crown jewels, selling them off and keeping the toxic waste makes for very ugly porfolio.
Somebody want to explain the mayo joke to me? I missed it
the only problem Thain will have is who will put the Mayo on his BLT
the only problem Thain will have is who will put the Mayo on his BLT
The origin of the mayo joke goes back to JPM and Jamie Dimon’s takeover of Bear. CNBC’s Mark Haynes was interviewing Dimon and accidently spit of glob of Mayo onto Erin Burnett’s blouse. The rest is history.
I believe MER is tanking because, as J.C. put it so eloquently last fall, people are already saying Thain has sprinkled a little Goldman magic on MER.
J.C., I hate you, and I hate your libertarian rants. I hope that one day you find yourself uninsured. I hope that at this time you find yourself in need of medical attention. I hope that we have socialized medicine at this time. Not because I believe in it, but because you would have the opportunity to write the most ridiculous rant against our welfare society. I hope that you die shortly after your diatribe is published. I hate you
Warm Regards,
The Anti-Christ
Seriously, can we block the mayo comments already?
anti-christ– are you talking about this http://www.dealbreaker.com/2008/04/merrills_thain_hires_former_go.php
Thank you, to the guest that commented at 3:43pm I am sick of these comments.
# 24 Whaaaa. You stupid idiot. People right into DB cursing and talking about sex acts and you want comments about mayo blocked. You are a complete tool.
Unnamed Hedge Fund gave MER a Cleavland Steamer..
#24 is TGFD’s grandfather, mayo tycoon Seemore Hellmanns
@ #27 -
Maybe I should “right” to DB and complain about your stupid ass not having a sense of humor and not being able to deal with a few crude jokes. If you have a problem with it, avert your virgin eyes away from the screen. Obviously, you don’t belong here.
You sir, are the tool.
@ #29 -
I nominate for the stupidest comment of the day.
the mayo jokes should be banned because they are stupid and annoying. period.
@25, nah, I’m talking about that asinine post Carney had after Thain’s first earnings call. Made me want to punch-i-size his face for free. I gave up posting on how much I hate him but I recently came into some leisure time, so hey, why not take out my life frustrations on an arbitrary target.
Hugs And Kisses,
AC
#32 is meredith
http://dealbreaker.com/2008/01/the_merrill_lynch_earnings_cal.php#comments
#1-33 go to hell, i love mayo
JC i know you are a big 1st amendment dude and this goes against everything you believe in but for the love of Gordon Gecko (at least for 24 hours) can you please ban all comments with the word MAYO in them.
Cursing and sex act discussions are the reason dealbreaker exisits. As for mircle whip – who gives a flying fuck what type of pre-fab, ediable oil product some fat ass, fly over state idiot, uses on their sandwich!!!!
It is b/c of NAB in Australia marking their CDOs to $0.10.
“In the posts above, “JC” doesn’t mean “Jesus Christ”??????
~The Forehead Slapper
Because XL terminated their agreements with SCA, leave MER holding the bag on their rotten SIV’s.
Dope @ 39 – JC= John Carney!
The mayo idiot should be blocked. After him is the guy who posts ‘x and y need to merge in order to survive.’ Seriously, DB has low standards which is normally fine, but these two are ridiculous.
http://biz.yahoo.com/prnews/080728/mxm007.html?.v=4
So, who screwed whom here?
You guys want mayo jokes and merger jokes banned, but don’t want to do anything about TGFD/TOGFD (and any other name he posts under)despite the despair he causes for so many?
mayo poster and ‘x and y need to merge poster’ need to merger in order to survive.
As much as I agree with everyone how TGFDousche is annoying, talking about him while he is away only fuels his fire. Lets enjoy this time without having to be reminded of such idiocy.
First!
they annonced stock offering, stock falling hard after hours
check out this link – it details a bunch of things MER announced today, including a new equity offering:
http://biz.yahoo.com/bw/080728/20080728006329.html?.v=1
Merrill to raise $8.5 bln selling new common stock
By Alistair Barr
Last update: 5:41 p.m. EDT July 28, 2008
SAN FRANCISCO (MarketWatch) — Merrill Lynch & Co. said late Monday that it plans to raise $8.5 billion selling new common stock as the brokerage firm tries to bolster its capital position. Singapore’s Temasek Holdings has agreed to buy $3.4 billion of the new shares, Merrill added. The firm also said it sold a big chunk of its U.S. super senior asset-backed security collateralized debt obligations, cutting its exposure in this area by $11.1 billion compared to the end of June. Merrill shares fell 5.7% to $22.94 during after-hours trading on Monday. End of Story
I smell a bailout?
Insider trading ahead of the news of them raising capital. Blue horseshoe hates MER.
Although technically it looks like Merrill is getting rid of the assets, it still retains risk that the Loan Star affiliate will default or will be unable to meet margin calls and then Merrill will seize the collateral and be stuck with the ensuing losses. This deal smacks of desperation, but Merrill is in fact desperate to put this mess behind it and move on.
mockthemarket
@8:19 – I doubt MER sinks on news of a recapitalization. The track record is that the re-cap has been good for one-day stock movements.
More likely, I suspect (read: pure speculation) that Temasek was getting its short positions in in case the boatload of MER stock it took in exchange for the new funds goes the way of Bear Stearns.
Actually, I guess that’s still insider trading. But hardly the kind the government tends to crack down on.
The only situation in which its the really unscrupulous “insider trading” is the ridiculously unlikely case of Temasek overhedging. In which case, Temasek (MER’s largest shareholder and holder of full ratchet rights) now perversely prefers MER’s collapse…
seriously – am i the only person in america who understood what was going on here and understood the real estate ponzi scheme?
i mean, did smart guys and girls really believe this bullshit, or did everyone just simultaneously lose their minds?
how did MER get involved in this crap?
what a shame.
and Thain is just another garden variety bullshit artist.
@9:04 – You can only make that argument if you shorted everything.
If you did, Congrats! You can now spend the rest of your life hitting golf balls on maui, play polo, and cruising the french riveria on your 130 ft yacht.
If not, then your “only person in america” claim is completely shallow.
Put your money where your mouth is.
Oh I dont know maybe because they had 4 consecutive quarters of losses and massive write downs?
@33 – well done on the super troopers reference. nice.
oh, and i think the x needs to merge with y to survive comments are funny…
Lehman + Mer
…(*)
profit
(*) bailout
You people are a bunch of immature idiots. This blog is no better than facebook.
MER’s management is going to buy 750,000 shares. They are getting cheaper by the minute.
can Merrill finance the MAYO i will buy at the supermarket tomorrow?
Merrill needs to merge w/ Mayo to survice.
MerrillAYO Lynch & Co.
This quote come via the Big Picture blog. It is pretty amusing (in a joker type of way).
Merrill’s $5.7B Write-Down, $8.5B Share Issuance
Posted by Barry Ritholtz on Monday, July 28, 2008 | 09:33 PM
in Corporate Management | Credit | Derivatives | Earnings | Valuation
I’m on an earlier than usual train home today, to take the missus out to dinner (she just flew back into NY today). Change at Jamaica, bump into a Natexis derivative trader I know from my old neighborhood. Our train comes, I sit with him, along with his pals from Merrill.
We are talking cars when one of the Merrill guys’ Blackberry goes off. He is a CDO manager, and he just got the IM that the big press release just hit the tape. The news about the write down and the new stock issuance is now public. He tells us about it — Write-Down = $5.7B; Share Issuance = $8.5B — and we all start talking about it.
My (naive) question: “Wait a second — didn’t Merrill just report last week? How did they not disclose a $5.7 billion dollar whackage?”
Merrill guy’s by-the-book-answer: “Earnings were the 17th; The decision had not yet been made to sell the ABS CDOs, or take the writedown, or issue more stock. That was done this week.”
I think: “yeah, sure it was.” Frickin weasels.
Other Merrill guy says: “Geez, the stock is gonna get hit tomorrow” (ya think?) The stock closed Monday at $24.33, down 55% year-to-date.
Merrill woman: “When do we buy this?”
CDO guy: “When it hits $15″
This is all a problem of affirmative action in this country. As an elite WASP who reminiscences about the long lost glory days let me explain:
MER’s former CEO Stan O’Neil is African American. Ain’t nothing wrong with them as long as they keep working on factory floors. Then these sweet affirmative action programs and scholarships come along and he finds himself on a scholarship to HBS, once a bastion of people who were refined, cultured, smart and superior. From HBS, he gets into Wall St., into MER and through the years demonstrates his ability to wreck and enterprise.
Affirmative action and stuff might work at the primary school level but it’s dangerous if you give scholarships like these to Harvard, Wharton and other professional schools. See the $45bn wreckage at MER as proof.
Anybody beg to differ.
E. Henry Forbes IV
Merrill offloading a large chunk of it’s CDO assets to Lone Star at a fifth of its original value and Merrill is lending 75% of the purchase price to Lone Star………………….
As Guest 53 pointed out, these CDO’s will go back onto the books of Merrill if and when their value drop another 25% or more. Merrill will, again, be stuck with the ensuing losses.
But I’m sure Lone Star will be buying these things using a new vehicle with Merrill onboard as a shareholder so Merrill will be able capture some of the upside should the value of these toxic junk go up (I think I have a better chance sleeping with Charlize Theron AND Tyra Banks at the same time). Other banks have done similar deals with hedge funds and distressed debt investors they are friendly towards. This deal goes to show that there is no REAL market for these toxic waste.
Allow me to ask the following question:
Thain, Fuld, and other Wall Street captains have been telling us that the worst is behind us for a few months now. Where is the fuckin’ bottom in this mess??!!
All these guys are lying through their teeth trying to tell us everything is okay. You know the US in trouble when the Bloomberg anchors try to stop their guests from using the dreaded “R-word” to describe the state of the economy.
This whole mess will only end when unsold housing inventory goes back to 3-5 months (currently stands at 11 months) and when normalcy returns to the housing and mortgage markets without government intervention.
I give it 12-24 months.
hi #56,
i got my feet held to the fire shorting intraweb stocks a little too early in 1999. so i wound up covering early in most cases because i couldn’t take the pain. shorting is tough game. \
but i came away with an important lesson. i learned to recognize a speculative bubble, raise cash and wait like a solitary hunter.
so i’m the guy who bought BAC last week @ 19 and C @ 15, etc.
i’ll write some leaps on this crap on rallies and collect 15% dividends on the the companies which continue to pay.
no polo ponies or golf for me.
you’re right. talk is cheap. so are most bank stocks and bank debt.
hi again, #56,
i’ll give you another prediction:
nyc (entire metro area) real estate will drop 35-45% over the next ~3 years.
hows that for a ballsy prediction?
just call me karnak (the great).
Why have Merrill just opened ( as of last week ) a physical oil trading desk in London, if things are this bad ? Oil markets have been extremely volatile to say the least and many of the established traders have taken heavy losses lately and some have even gone bust…
Established traders who’ve taken losses in energy have mostly been the losers who trade purely on a financial basis at banks like UBS and certain hedge funds.
The major physical players(Glencore, Vitol, Macefield, etc.) have almost all made bank
#64 Guest, Apparently a lot of refined, cultured and superior WASPs at Merrill are BLIND and somehow let an Afro-American sneak through the corporate ladder.