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Merrill Lynch’s Wealth Managers Retreat To Scottsdale

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Merrill Lynch is down around 4 percent today following news that it had had reached agreements to sell convertible preferred stock to Korean Investment Corporation, the Kuwait Investment Authority, Mizuho Corporate Bank and the New Jersey Division of Investment in exchange for $6.6bn of new capital. The move was made to insure creditors, rating agencies and other financial institutions that Merrill would have the capital to sustain losses but investors seem unimpressed. The unexpectedly large size of this capital infusion has some speculating that mortgage related write-downs and revenue losses could be even worse than expected. Merrill reports on Thursday.
So what should we expect from Merrill on Thursday? We won’t venture a guess at the numbers (but you should feel free to do exactly that in the comments below) but we don’t mind talking about Merrill’s strategy. Reports have said that newly minted Merrill chief executive John Thain plans to elevate the importance of its wealth management group. O’Neal had worked hard to diminish the importance of the brokerage arm in favor of trading and investment banking business. Word has it that Thain is going back to the core strength of the stampeding herd.
So what is wealth management doing right now. The managers from the wealth management business are conducting an annual retreat at the Biltomore in Scottsdale, Arizona, according to a source familiar with the matter. Merrill confirms that the managers of the wealth managers are meeting to “plan for the year ahead.” It declined to confirm the location.
The Biltmore might strike some investors who are hoping that Thain would cut costs as a bit extravagant. Here’s how Fordor’s describes the resort: “Designed by Frank Lloyd Wright's colleague Albert Chase McArthur, the Biltmore has been Phoenix's premier resort since it opened in 1929. The lobby, with its stained-glass skylights, wrought-iron pilasters, and cozy sitting alcoves, fills with piano music each evening. Guest rooms are spacious, with Southwestern-print fabrics and Mission-style furniture. Accommodating staff are unobtrusive. The Biltmore sits on 39 impeccably manicured acres of cool fountains, open walkways, and colorful flower beds.”
Then again, if you plan on having these guys be the future of your firm, a week at the Biltmore might be exactly the way to rebuild morale.
Do we have any volunteer spies in Scottsdale who want to go play the fly on the wall role at the Biltmore?


Merrill Lynch Bankers Just Want To Live, Damn It!

They (still) can't deal with Bank of America's freaky ass rules.