CNBC’s David Faber reports that Citi and Morgan Stanley are in “deep” talks about a merger of their brokerage operations. It would be apparently be structured as a joint deal but would “involve a payment from Morgan Stanley to Citi of an undisclosed sum that would give MS the larger stake.” According to Faber, that “could mean 51 percent” but Morgan would have a right over a period of years to increase it’s stake, making it effectively “a long term sale of Smith Barney to Morgan Stanley.”
John Mack: “I Want You Inside Me” Vikram Pandit: “What?” John Mack: “Oh, Just ‘Hey,’ From Before”
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- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
Another dumb move by both idiots.
Will it be known as S&M, BS or BM ?
oh, the sweet, sweet synergies this will create.
unemployment 10% by june…
Bargain Smithley
whats the quote from?
Morgan Stanley Dean Witter Smith Barney. If length of name were a measure of awesomeness, they would be way above Sham-wow, slightly better than mighty putty, but just below Snuggie.
absolute hogwash
Sounds like at least another 10-20,000 redundancies/layoffs and still no profits on either side.
Motto: “We lose money the old fashioned way — falling off the tiger and being eaten by it.”
pandit is about to drop his load (of brokerage business) on mack…for pay? isn’t solicitation illegal?
hey we’re both shitty individually..lets just put our BM’s together
11 again. The more I think about this the more I like it.
@11: then the sale, and Rubin resigning, bodes pretty ill. Not trying to flame, but brush up the resume.
@11: I thought that the credit card group was the only one keeping you guys afloat.
Note to Mack: buying a pig and putting on the farm does not make it a steer…..
WHAT ARE THEY GOING TO DO WITH PRIMERICA?!?!
SAVE PRIMERICA!!!
best movie reference EVER.
that just made my day.
is this an orderly liquidation of Citi assets because they are STILL in trouble???
@14
My job is secure, and so is pretty much everyone I work with, with perhaps the exception of some back office folks. Thanks for your concern, though
I DON’T THINK SO.
@20 Did you drink the kool aid or something? Or are you doing lines of coke off of Pandit’s ass cheeks?
Guess I’ll cancel my order of onions and Limburger cheese, heh heh
WTF is PRIMERICA?!
If all else fails sell SSB brokers to MS. Last ditch effortby Pandit to raise capital by selling useless cattle to another firm.
Aaaahh the circle of life. One dude sets up shop…it grows and it fold into a bigger firm which is then take over by a bigger fish which becomes a mammoth in no time…which then spins off some shit and its eventually broken off into pieces.
If all else fails sell SSB brokers to MS. Last ditch effortby Pandit to raise capital by selling useless cattle to another firm.
WHAT ARE THEY GOING TO DO WITH PRIMERICA?!?!
PRIMERICA IS THE MOST PROFITABLE SUBSIDIARY. AT LEAST THAT IS WHAT SOMEONE AT PRIMERICA TOLD ME.
Pandit winner, Mack loser….wait they are both losers….
WHAT IS THE QUOTE FROM
Way to go Mack…
I guess when your neighbor gets addicted to crack, it’s a probably a good time to ask how much he wants for that expensive watch he owns. Just keep feeding that addiction…
The quote is from a movie called “Wet Hot American Summer”
Primerica is part of Citi? I thought it was a front for the Mormon Church.
I don’t like this story anymore. It tastes like burger.
@22
I’m a high producing broker with a growing book of business. They don’t fire guys in my line of work, ass clown.
Primerica is sort of a borderline Pyramid Scheme. Person A recruits persons B,C,D to sell Citi products for him (usually cold calling or relatives/friends. Person B,C,D makes for example $100 per deal. Since Person A is their supervisor/manager, he gets $100 also per person. Your goal is to get into Primerica, make money, then recruit. So in a few years time, Person B,C,D will each recruit another 3 people and Person A will get a share of their sales as well. You can make a lot of good money on it, but mostly the employees are younger grads looking for a job quickly. In this environment now, I can’t really see many people spending money buying CITI products
I don’t like this story anymore. It tastes like burger.
Primerica = Ponzi scheme similar to Madoff
I don’t like this story anymore. It tastes like burger.
I don’t like this story anymore. It tastes like burger.
@38 and 40: You can’t do what I do.
Loving the “Wet, Hot, American Summer” Quote!
pandit: Arty, I need you to do me a favor. I need you to take a shower today.
mack: OK.
pandit: ‘Cause your parents are coming tomorrow, and I don’t want to get in trouble.
mack: Sure.
pandit: You haven’t taken a shower once this summer. Not once in 8 weeks.
mack: I will.
pandit: You’re covered in dirt. Take a shower.
@38 and 40: You can’t do what I do.
i keep saying this, but brokerage ROA is under 80bps (and losing roughly 10bps a year)…it’s essentially a slow train wreck
MS knows they can’t build a bank fast enough to compete with BAC, WFC etc. but they figure if they can pile up a massive brokerage biz, the gov’t will let them continute to write FDIC backed paper, which they need to survive
this is a smart trade for Vik, because he gets some money know, and in the event there’s some upside to brokerage, he can get a piece of that
and it’s 10000 less pikers to deal with
@38 and 40: You can’t do what I do.
OMFW 37 STFU
@38 and 40: You can’t do what I do.
@35 probably works for primerica, Payday Loans, in your home…
What about…
“Primerazoff Scheme”??? BRILLIANT! Somebody put that in Wiki and give me my due credit!!!
Morgan Stanley + Smith Barney = Morgan Blarney.
Great another fiasco waiting to happen. MS does not need the wisdom on idiots of smith barney a total disgrace for Mack what is he smoking? Certainly nothing good
Maria Bartiromo’s favorite movie is Mamma Mia.
You are NOT a dancing queen, Maria.
You are…….what’s the bad guy from Thundercats???
@52 more like Morgan Stanley + Smith Barney = Morgan Stanley
@54 – Mum-Ra?
YES! MUM-RA!
all she needs is blue skin and snakes in her hair. lol.
Anyone heard from Sally Krawczek recently?
Loving the “Wet, Hot, American Summer” Quote!
Vikram: What about tall debbie?
Mack: Too tall.
Wasn’t there a similar “Get Into My Belly” quote just waiting to be used?
When will this shit stop?
Best movie quote ever.
Another years pay not to change jobs…love this shit let the consolodation continue. so much better than reseach
retail broker
I am a retail broker. What is Morgan Stanley?
I am Vikram Pandit. What is a failed captive hedge fund?
Funny. They were JUST starting to get some traction on integrating Smith Barney and Salomon. Now Smith Barney and Morgan? Hilarious.
they should just give all new employees snuggies with the new firm name embroidered on the back, “Madoff Securities”
Like rats crawling all over each other to keep their heads above water on the Titanic…..
@19 C is a zombie that just won’t stop moving around and letting pennies fall out of its pocket.
It is a joke that this company has not been liquidiated and a travesty that govn’t capital continues to be invested in an enterprise that was insolvent more than a year ago.
@39
It is a pyramid scheme, not a ponzi scheme clown. There is a distinction.
@35: Equities in Dallas..
@67
Ha no sh!t, 20+ year system integration/data migration project right there, and that’s absent procedural/cultural/etc issues!
@ 71
Bingo.
MS and Smith Barney systems have very different client bases and client profiles. MS distributes more in-house / captive funds, SB sells more individual securities and typically has larger accounts. SB more like ML than MS. Probably good overheads savings while bringing something to both, including more channel conflicts and culture conflicts. Wouldn’t want to watch that w/o having some strong drinks on hand.
John Mack:
1. passed over by the MS Board in favor of a guy from Sears
2. fired by Credit Suisse after accomplishing nothing more than creating the LGBT Committee and championing the hire of several prominent women, in his lame attempt to redress the culture he created at MS, which was sued as he left by groups of gays and women
3. back at MS, driving it into the ground
he’s begged the last 2 President’s to be Treasury Secretary, but even an idiot like W can tell a narcissistic, power-hungry freak from a Secretary of the Treasury.
John Mack:
1. passed over by the MS Board in favor of a guy from Sears
2. fired by Credit Suisse after accomplishing nothing more than creating the LGBT Committee and championing the hire of several prominent women, in his lame attempt to redress the culture he created at MS, which was sued as he left by groups of gays and women
3. back at MS, driving it into the ground
he’s begged the last 2 President’s to be Treasury Secretary, but even an idiot like W can tell a narcissistic, power-hungry freak from a Secretary of the Treasury.
John Mack:
1. passed over by the MS Board in favor of a guy from Sears
2. fired by Credit Suisse after accomplishing nothing more than creating the LGBT Committee and championing the hire of several prominent women, in his lame attempt to redress the culture he created at MS, which was sued as he left by groups of gays and women
3. back at MS, driving it into the ground
he’s begged the last 2 President’s to be Treasury Secretary, but even an idiot like W can tell a narcissistic, power-hungry freak from a Secretary of the Treasury.
You’d think Mack learned his lesson after the craptabulous Dean Witter purchase. Complete moron …
@74
you really think there is a “culture” amongst brokers? they are paid exactly the same, and 90% of them spend most of their time distancing themselves from the “brand” they’re working for, to keep their books portable
the most idiotic part of this is that I bet there’s 80% overlap in branchs…meaning, this isn’t even a new market kind of play, just trying to buy assets, and keep brokers from defecting
even more stupid, these broker dealers have been trying to pitch themselves as bank alternatives for years, but their moronic handling of the auction rate securities has left the really deep pocketed customers that they fucked over totally immune to the “consolidated” account pitch
20,000 knuckle draggers…thank god for the do-not-call list
so tarp money buys troubled assets! citibank is a complete disaster. ms would be brought down by this deal. not only will these dumb ass sb brokers demand “retention” bonuses, but most of the good ones will just jump ship and use this as excuse to get their clients to leave now!
why didn’t they nationalize that train wreck citi when they had the chance in november? so they can do “joint ventures” with another tarp participant at inflated market values.
does anyone think that brokerage is going to make more money this year? or the next?
if ms had any real balls they would just buy some small regional banks over time and build up the deposit and lending base. that would be too smart though and take some time and real effort. buying into another “distribution model” that has been decimated by years of consultants, management changes, segmentation, integration, product disasters and on and on at smith barney is the nuclear option for ms.
20,000 knuckle draggers is too much of a compliment!!!
I heard Win Bischoff is doing an LBO of Citi’s comissary operations.
&54…e_anthony58. For a while there, I began the belief that you had something between your ears other than a vacuum. What the Hell do Maria Bartiromo have to do with an article that began with something David Faber commented on. Stick to the program.
…and the review of the “merger” of Smith Barney and Morgan Stanley – which was simply a two word review – “Shit Sandwich”!
Guys its become pretty fucking apparent what is transpiring within the financial world, either figure your shit out or you are toast…the days of spending a few hundo or grand a night out are over. If you don’t have a stash, then I suggest to be weary. This downturn will be more severe than most think. The strongest will survive. You are either one step ahead of the game or you aren’t!
FYI…Grads entering 2009 for a position in the financial world (US Firms) are toast for 2009 GL!!! I suggest thinking European or even Asian firms…can’t be picky
Too Zoe Cruz. Didn’t read.
Even if this is mostly a financial deal (i.e. little/no operational combination, etc) it still doesn’t make much sense. Both firms could just streamline their individual b/d’s individually (there’s plenty of room for improvement, lets not kid ourselves) at each.
@30 @32 @43
I believe the quote is paraphrase from an Austin Powers movie spoken by the Fat Bastard character.
“I want you in my belly!”
@87- wrong, dumbass. it’s a quote from wet hot american summer:
Coop: [as Katie walks away] I want you inside me.
Katie: What did you say?
Coop: Oh hey… from before…
http://www.imdb.com/title/tt0243655/quotes
They still won’t make any money. You know why? Because they have nothing to sell.
The deal is primarily for the purpose of reducing the expensive broker ‘recruitment’ that severely dampens profitability at ML, MS,SB and UBS’ retail units.
Some of these firms are paying brokers up to 200-300% of their T-12 gross commission (upfront checks in many cases). That amounts to a hefty payday for brokers who had $500k+ in commission (not unusual for those with $90MM+ in assets under management. Deals like these take years to produce positive returns- and that’s assumming the broker can bring most of his assets over.
If this current pace of poaching continues, the entire brokerage model will quickly become unprofitable.
@90
They WERE paying 2-3x production, but not any more. Just like a still-employed banker can’t jump ship with a fat signing bonus due to supply/demand, neither can a broker. Sure, the top of the top may be able to, but that’s hardly the thing hampering profitability champ.
If the deal goes through, how much attrition do you think is gonna happen, between people who want no part in the experiment, and those whos brokers get laid off and don’t wanna have their accounts transferred to someone they’ve never met?
Anyone who thinks this deal makes any sense other than giving the gov’t and/or other idiots the impression that Citi is actively trying to shore shit up is retarded.
I will, however, swallow my words if someone can come up with a legitimate rationale for the transaction, although I’d be quite surprised if anyone could.
89 don’t be dumb…they are the only one’s making money and will continue to do so in 2009 because of their fee structure
Retail brokers are “pikers” and/or “second career losers” who farm-out assets out to professional money managers because they don’t know how to do it themselves. They are a dying breed because there is absolutely zero value-add.
none, 0, nada. no legitimate rationale for the deal. did a lot of brokers save MS during the credit crisis? did lack of brokers hurt GS? no,no. this is just an orderly liquidation of assets before the govt takes over the shit assets that pandit/prince/weil/rubin and so-on piled onto the carcass that is citi. lesson 1. if your stock goes down when you sell an asset that means you are getting faced. but the bastards at citi can’t get anyone to buy the thing even after leaking the thing on friday and giving someone, anyone, the weekend to make a bid. the shiti that never sleeps!
this is another govt orchestrated deal; this isn’t a strategy
this is another govt orchestrated deal; this isn’t a strategy
this is another govt orchestrated deal; this isn’t a strategy
Citi Morgue.
A lot of you don’t understand, Dean Whitter and Smith Barney (the retail arms of the firms) are the only thing that is profitable (in 2008 and going forward).
Morgan Stanley is genius. They are building up a very strong Global Wealth Management unit, and will sell that shit off in 5 years.
It’s a part of the restructuring on Wall Street.