Morgan Stanley Smith Barney: "Check Out How Much Money We'll Save When We Fire An Asston Of Employees"

Posted by Bess Levin, Jan 13, 2009, 5:28pm

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MS Smith Barney Investor Presentation [PDF]

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Comments

1

Posted by guest , Jan 13, 2009 5:34PM

Synergies in bankruptcy

2

Posted by guest , Jan 13, 2009 5:36PM

All they talk about are the "wealth managers". What happens to the Smith Barney traders, salespeople, etc.? Do they want this still?

3

Posted by guest , Jan 13, 2009 5:37PM

Hey, let's put our heads together and create the worst company ever created! Betweeen your toxic debt and our suite of garbage financial products, we can drive Wall Street into the ground and then use the bailout money for our golden parachutes! Yippie!!!

4

Posted by guest , Jan 13, 2009 5:39PM

Too long; didn't read.

5

Posted by guest , Jan 13, 2009 5:41PM

The IT/Ops integration will be a complete nightmare. None of the firms have a superior state of the art middle or back office operation. It'll take an army of managers to consolidate these units.

6

Posted by guest , Jan 13, 2009 5:42PM

At least you still have the brand recognition ...

7

Posted by guest , Jan 13, 2009 5:42PM

Too Morgan, didn't Barney.

8

Posted by guest , Jan 13, 2009 5:45PM

Yeah right! Every CEO who performs a smokescreen like this (and that's exactly what it is...the simpletons think the sheeple won't notice their toxic balance sheet if they put out some cheerleaders in front of this crap!) talks about ALL the money they'll save through synergies. Guess what? There are no synergies in turf wars. What synergies did MS get with Dean Witter? Nothing but headaches and a black hole to throw cash. Shows you the brain capacity of Mack....he didn't learn from the last mistake!

9

Posted by guest , Jan 13, 2009 5:45PM

5 Its always a nightmare and IT people whine miserably even without having to do an integration. But the end result will be a significant cost savings.

10

Posted by guest , Jan 13, 2009 5:47PM

These guys are damn good at churning out pitchbooks.

11

Posted by guest , Jan 13, 2009 5:47PM

@5 This will buy the Citi SB guys some time to get new jobs.

12

Posted by guest , Jan 13, 2009 5:51PM

11 Where? Wachovia? Merrill? UBS? Its an industry with revenue in decline and ownership in flux. No broker is gonna run cause no firms can afford to pay the sign-on bonuses they could have even a year ago. Deal with it.

13

Posted by guest , Jan 13, 2009 5:59PM

@12 They can go work your mother.

14

Posted by guest , Jan 13, 2009 6:00PM

Imagine if you were an ex Legg Mason or AG Edwards FA.

i.e.
"Mr and Mrs Smith AG Edwards is going to be teaming with Wachovia to create the BEST platform to help me work with clients"
"Hey Mr and Mrs Smith its John Broker again looks like Wachovia is going to be teaming with Citigroup to provide you with the BEST back office support around"
"Smiths its Broker I honestly have no fucking clue who is going to be custodian of your assets tomorrow, I think Wells Fargo, which doesnt even have a history of being in the business, but fuck it well roll with the punches. PS your account is down 40% this year sorry about that"

15

Posted by guest , Jan 13, 2009 6:00PM

Where is the slide showing "Target Expense Inefficiences." Would like to see that one.

16

Posted by guest , Jan 13, 2009 6:02PM

I think I'm lost...is this the Barney the Dinosaur web site?

17

Posted by guest , Jan 13, 2009 6:02PM

Just to clarify, it'll be a *metric* asston of employees.

18

Posted by guest , Jan 13, 2009 6:07PM

We plan to fire everyone then bring in Suze Orman to harangue clients in large groups.

19

Posted by guest , Jan 13, 2009 6:10PM

Suze is more man than Vikula will ever be. Bring it on!

20

Posted by guest , Jan 13, 2009 6:16PM

from the Citigroup Smiff Barnsey Career Center...with our 325,000 err 250,000 umm lots of employees is a testament to the intelligence, creativity and commitment of our people.

..we invite you to explore the many career opportunities we offer:

21

Posted by guest , Jan 13, 2009 6:17PM

Step 1: Fire Everybody
Step 2: ???
Step 3: Profit

Damn Gnomes are everywhere.

22

Posted by guest , Jan 13, 2009 6:25PM

Vicriminal should hire Annabel Vartanian as a consultant.

23

Posted by guest , Jan 13, 2009 6:27PM

21
Step 2: Draw a short vertical line down that short horizontal line. See how -$4.7B magically becomes +$4.7B.

24

Posted by guest , Jan 13, 2009 6:31PM

@9 "But the end result will be significant cost savings"
really???
Integration might eventually save money if you made the huge upfront expenditures on technology AND you get strong backing from the business side. Do you think they're likely to get either?
Mark my words, in 10 years they will still be 2 completely different companies in the back office, and therefore be less efficient as one rather than two entities.
*cough*salomonsmithbarney*cough*
@5 you had the right idea...

25

Posted by guest , Jan 13, 2009 6:34PM

and the staplers?

26

Posted by guest , Jan 13, 2009 7:31PM

And the Pulizter Prize for best commentary using the term "asston" goes to..... BESS LEVIN!

27

Posted by guest , Jan 13, 2009 7:38PM

HSH Nordbank just emailed to the US banking / merchant banking / VC groups that there will be no bonuses or pay increases

28

Posted by guest , Jan 13, 2009 7:42PM

@8

Comment of the day.

29

Posted by guest , Jan 13, 2009 7:49PM

at 14, best post ever

TRB

30

Posted by guest , Jan 13, 2009 7:51PM

How many ounces in an asston?

31

Posted by guest , Jan 13, 2009 8:03PM

What I find amazing is that the "investor presentation", which is supposed to tout the brilliance of the JV, is only four pages long (excluding the title pages).

Seriously, there is no detail in the presentation, and it will give investors serious concern that the JV was an ill-conceived plan constructed between Mack and Pandit on the back of a cocktail napkin.

32

Posted by Novice , Jan 13, 2009 8:09PM

@17 Is metric or imperial the larger one?

33

Posted by guest , Jan 13, 2009 8:29PM

Citi has been trying to merge the Sollie and SB back offices without much success for like 10 years and spending big bucks to fail at it. Merge SB and MS back offices to SAVE money? I don't think so.

34

Posted by guest , Jan 13, 2009 8:31PM

@31 you read my mind

35

Posted by guest , Jan 13, 2009 8:39PM

Too chai wallah, didn't swallow

36

Posted by guest , Jan 13, 2009 8:45PM

@2 Smith Barney is only the brokers. All the other business (sales, trading, research, investment banking, capital markets, etc) that were part of SB pre purchase by Salomon are part of the Institutional Clients Group (ICG) formerly known as the CIB.

37

Posted by guest , Jan 13, 2009 8:48PM

@14, Hilarious.

38

Posted by guest , Jan 13, 2009 9:07PM

@22: Annabel Chong would be better.

39

Posted by guest , Jan 13, 2009 9:28PM

Nice fuzzy math on the synergies of revenue.

I love how these idiot CEO's assume the revenue of pre-merged companies will add up after the merger.

That is almost never the case. Customers get torqued with large companies and move their biz elsewhere.

Ask Sprint/Nextel or Dow/Carbide if their post merger revenues added up!

40

Posted by guest , Jan 13, 2009 10:26PM

39 I repeat: there's no place to move to. Wachovia (old Pru and AG Edwards) is merging with Wells; Merrill with BofA; UBS is deep in s!!t

41

Posted by guest , Jan 13, 2009 10:49PM

Forgive me for asking, what does "personnel" mean? Is that HR / Legal / Compliance?

42

Posted by guest , Jan 13, 2009 11:05PM

oh, don't forget all the lawsuits that have been talked down with clients, sales assistants, etc. by the knuckle draggers at sb and ms! synergies obliterated by settlements!!! this deal sucks.

43

Posted by guest , Jan 13, 2009 11:07PM

complete liquidation of shit is still shit

44

Posted by guest , Jan 13, 2009 11:08PM

the only people who think it sucks are SB back office, cause their days are numbered.

45

Posted by guest , Jan 13, 2009 11:12PM

are these people at citi just complete morons? synergies, consultants, deals. they are the walking dead of the financial world if they think that this has any chance of success. what a train wreck.

46

Posted by guest , Jan 13, 2009 11:18PM

are you kidding me? we taxpayers are funding this deal and for what? so brokers can get paid a billion dollars to stay at the same companies that lost us 40 to 50% of our money last year. i hope those dumbasses in congress rip this thing to shreds. the brokers get paid millions while the working stiffs get...stiffed.

47

Posted by guest , Jan 13, 2009 11:54PM

This is a sad day for every stinkin' product specialist at SB. Just think of all those worthless options (remember 4:1?) and now all that worthless deferred comp stock. Crap.

48

Posted by guest , Jan 13, 2009 11:56PM

@46. You working stiffs keep voting in the assholes who run the country this way. Go Rock the Vote, dude.

49

Posted by Lowly Assistant , Jan 14, 2009 12:27AM

I'm sorry, but all the folks bitching about this deal are those that were burned in the process, and the commentary doesn't reflect the deal in itself.

The move was brilliant. SB is a great asset, which is why it fell into the ginormous Citi snake's mouth in the first place. Per usual, Citi, with its bulk of "cash" and operations, mismanaged the arm. The reason integration didn't fully occur has very little to do with the "process," but rather Citi's many inabilities to perform.

The very short-term: yes, the deal stinks. Yes, cuts are made and operations slim down as much as possible. Money is lost, Mack is thrown to the fire, and everyone bitches about the bleak outlook of the "merger." But, the dust will clear. Yes, it will (quicker than you think).

Not to get conspiratorial, but the fact of the matter is that names carry confidence. Citi is GM, and the informed folks will always remember their swelled, sad state of mismanagement. Why not wind down, sell off, and go back to what you know? For all the shit MS and GS have gone through in the past year, it'll come as no surprise when clients likely remain with the two, and new clients stray from ML and the now defunct LEH for assistance. It'll take time, but the names will continue to carry "prestige" and confidence (and I puke).

BAC can have ML, and they'll do pretty well for themselves. ML has had their hands in every fuck-up since inception, but the smaller (yet, more numerous) will still flock there.

Confidence is your number one priority, and sometimes a name/brand carries it all.

I think the SB deal makes sense. They're the NB of LEH; the sweetest piece of the pie.

I'm drinking, and that's my opinion.

50

Posted by Anal_yst , Jan 14, 2009 12:31AM

@ 44

Idiot, as many above have pointed out, the middle/back office 'folk are gonna be the only ones still employed in a decade (for reference, check up on how the SB/Citicorp integration has gone...10 years, still no where close).

They could (read: should) have kept each separately, done the hard work (i.e. invested in systems/processes/procedures, cut the underperforming brokers, etc), and been fine. Now, as many above have pointed out, we get the lipstick on these pigs; this deal is nothing more than posturing.

51

Posted by Anal_yst , Jan 14, 2009 12:45AM

@ Lowly

I agree with some of your supporting arguments, but not with your conclusion.

Its too much to type out (also drinking), it you want to discuss, you know how to reach me, although hopefully I"ll throw something coherent together in the next day or two, we'll see...

Cheers!

52

Posted by Lowly Assistant , Jan 14, 2009 1:01AM

Anal,

I know you know I'm drinking, and so nothing will seem coherent (at least on your side of the screen) at this time, but my "conclusion" was most definitely a huge generalization/fuckup. I think MS just bought a rolodex, and nothing more. Do I think that's smart at this stage of the game? Somewhat. I think that'll definitely bring in business in the coming years. However, the whole SB vs. NB was kinda fluff. I'm not sure if that's what you're referencing, but either way I look forward to the 1-2 writings.

And, if that's the case, I offer you a gem, mitigating me of all wrong doing: http://dealbreaker.com/2007/08/lloyd-blankfein-wants-to-be-a.php#comments

Yeah, I'm tired.

53

Posted by guest , Jan 14, 2009 1:01AM

Go to Morgan and get 20% under 250k with the axe an inch away and eyes on your book, or go independent and get 90%, and work from your den in your bathrobe? Hmmm...what to do, what to do?

54

Posted by guest , Jan 14, 2009 7:21AM

i can't believe anybody here would be stupid enough to buy the "synergies" story of this deal! go buy c and ms today dumb asses. this is a terrible deal in a good market. brokerage is not a "normal" business that can be integrated like a division at gm, j&j or disney. brokers are selfish, money hungry and opportunistic. the good ones will have a bid away. the bad ones will fight to stay. every client that is unhappy with performance (ie everyone) has a good reason to move their account. integration will be as easy as two trains colliding.

55

Posted by guest , Jan 14, 2009 8:00AM

one pig + one pig = two pigs you have to feed

they should have got a rabbit. one rabbit + one rabbit = alot of rabbits = food and clothing

56

Posted by guest , Jan 14, 2009 8:03AM

Smith Barney is just as dead of a brand as Dean Witter. I had almost forgotten about it and I am sure many others have. Long ago they should have retired it and used the Citi name for wealth management and brokerage services, but as many have pointed out Citi never really integrated to the extent it should have by now. The reason Goldman is the 800lb gorilla is that they know what they do, and do it well under the GS name. Now Morgan Stanley should do the same thing and not only lose the Smith Barney name, but whatever businesses are not long term moneymakers.

57

Posted by guest , Jan 14, 2009 8:34AM

Won't all that savings be eaten up by all of the retention bonuses they will be paying? I don't get it.

58

Posted by guest , Jan 14, 2009 9:52AM

@14 Hilarious!

59

Posted by guest , Jan 14, 2009 10:26AM

@49 When the dust settles? The dust will never settle. Could Mack integrate Dean Witter into MS? No he couldn't. What makes you think he can pull anything out of this mess?

The whole deal is just a smokescreen. Mack hopes everyone will be watching the merger and not see his stinking pile of dog crap on the firm's books...eventually that will come home to roost though.....

60

Posted by guest , Jan 14, 2009 10:27AM

The good brokers will go independent or hop to a smaller firm instead of dealing with the hell of integration that will occur. Also, there's less likelihood they get canned at a regional firm. There's more places to work than the larger bulge bracket firms.

This deal doesn't make sense and to have it done on the backs of taxpayers is a travesty and a crime.

61

Posted by guest , Jan 14, 2009 10:46AM

@43 - actually, no - complete liquidation of shit is diarrhea.

62

Posted by guest , Jan 14, 2009 11:08AM

I'd like a CEO job...make really bad decisions with no factual backing, have little to no understanding of company operations, risk, or exposure, make a ton of money, and after it fails miserably just deny the failure, claiming it was a success.

Dean Whitter was a miserable failure for MS.

63

Posted by guest , Apr 30, 2009 2:09PM

For all you clowns. MS is Dean Witter. A cut rate shit shop that stole a name. The original elite heavy hitters are long gone. Smith Barney had twice the market share with affluent individuals, just look at the Barron's top 100 list. MS was lucky to have it fall in their lap. And true, the biggest producers are setting up their own firms. If you don't have a ton of money, you are better off blowing youself up at E-Trade. Otherwise, you don't get the care and feeding you need. Trust me, Smith Barney is capable of tremendous value to an affluent individual, problem is sorting out all of the fifedoms and silos at all these places after years of shoddy mergers. Find someone you trust and stick with them regardless of what firm they are at. Morgan Stanley will be adopting the Smith Barney platform lock stock and barrel.

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