The Undergraduate's Guide To Q&A On Merril Lynch's Q1'08 Call

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I was curious how high level the Q&A section of the Merrill Lynch call might be and what the "rest of the world" thought of the chaos on The Street. So I enlisted help. I pestered a good friend of mine who is a Junior studying economics at a prominent university, until she agreed to transcribe the Q&A (after I threatened to tell her boyfriend about the shopping spree from last month she caved). Here are her raw notes:
I (Heart) Jeff Heart, since he doesn't seem to be able to operate his phone. Now thats a questioner.
UBS: You guys are screwed with these impaired securities, right? Even though you tell us they have limited impact on our P&L.
ML: Nah, we are just going to hold them forever.
UBS: You guys are screwed because your leverage ratio is huge right?
ML: Did you not hear John, idiot? John said this. Did you not hear John? We don't really disclose that. Not really.
UBS: Uh, what about liquidity and can I borrow a cough drop?
ML: Ok, so John mentioned our liquidity pool, and there was our 10-K, and John answered this. Sheesh.


Deutsche Bank: What's up with the decline in the brokerage margin?
ML: We are always looking to improve our margin. Duh.
Deutsche Bank: Why not monetize Blackrock for $5 billion?
ML: We have a great relationship with them. We love them. We'd miss them if they had to go. Our clubhouse would be lonely.
Deutsche Bank: Are your reserves just fucked or what?
ML: Hey, we are under Basel II, get it? And that's all I'm saying about that.
CitiGroup: You don't need to raise capital? Right. So, tell us when you are going to change your mind on that? I mean, you expect to be profitable in future quarters or what, cause that's gonna happen. Hah!
ML: We raised $12.8 last year, lost a bunch and had $4.2 left over. So really, we kinda made money on that deal. Sort of, but not really. As for profit? We don't give guidance but probably since we aren't going to raise capital you can just (nudge nudge, wink wink) guess what I mean by that, right?
CitiGroup: Are you buying Alt-A assets or what? That looks stupid.
ML: Yes.
CitiGroup: And you marked them down to $0.70 or something?
ML: You know, forced liquidations. Hey, is that Tiger Woods over there? Yeah, I think it is!
CitiGroup: What about auction rate securities? That blows for your clients, right?
ML: Our clients have a bunch of these. Don't worry, they'll pay out at par. Eventually.
CitiGroup: How are you using the Fed facility?
ML: Oh, we just tested it. We don't really use it. No, really. Just testing.
CreditSuisse: Hey, how's private equity treating you? And on the equity side, are you guys going to hang on to these really big concentrated positions, hedge them or what?
ML: We are doing the Bob Barker thing. If the price is right, we will sell. Private equity revenues are down $600 million. Ok, so how are we for time? Don't we have the Girl Scout tour coming in?
Buckingham Research: Gee, you guys sure do pay yourselves a lot. What's up with that?
ML: You know, employee stock.... We are firing 4,000 people, so that will be the end of that. So, we don't give forward guidance, but the comp line is going to go down. But we aren't saying it will go down, cause we don't give guidance. Ok, we are hanging up. No, we aren't saying goodbye. We've got work to do and you've wasted enough of our time already.
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