V NMerrill

Contemplate why Merrill would come out with a bearish report on the brokerage industry, causing the five percent decline today in the financials. It would seem that in criticizing brokers they risk being tarred with their own brush. I have found that when a brokerage says something like this, usually they know of something within that will soon be divulged; recall how Merrill's Chairman announced before Aug 31, 1998, when Long Term Capital hit the fan, that the troubles were not over. Surely such a report would have been cleared with the Pope.


So much for the theory that during Olympic Games, the host country's stock market goes up. It worked for Italy and Greece, but that's when the cycle changed.


Contemplate the way the market joker sets up for the middle of the month when the CPI report is released. The last five were greeted by the S&P futures with up 40, up 19, up 6, and up 26. Preceded by a down 53. Six of the last eight opens have been down. The moon looked full. Shipping index is down 23 days in a row, and commodities after one of the worst one-month declines ever, were up a googol yesterday. None of this is predictive, as that would change the tempo. But mistakes will be made.





Speak your mind

4 Comments so far

  1. Ronald Weber on August 15, 2008 2:51 am

    Or maybe he is just playing the momentum game like most analysts, trying to get maximum attention and fame. In 2006 he forecasted that BAC would buy Barclays, and now he tells us what we all already know, only that it's not over, thank you for this amazing insight!

    As an analyst your bonus probably also depends on the "entertainment" factor, that is how much coverage you get for the bank, how much crowd you attract at presentation, or how many new clients doors (for one-to-one meetings) you can open. Dotcom analysts were experts at dramatically playing these trends, and so were the commodity analysts recently (see the oil guy at GS). As an analyst, when you've been in a dull sector with no news for years or decades and you see that your time has come, what do you do? It's a once in a lifetime chance to fully play the trend and really become wealthy.

    From what I've quickly looked at, the ML analyst also seems to have a track record of making predictions based on "mysterious" insights, adding to his aura and privileged access to information. So not much change since the antics days of the oracles !

    If Vic's point turns out to be correct (ML used by a higher authority to prepare the markets for something big) then we can all pack our bags and start growing cranberries in a farm!

  2. michael bonderer on August 15, 2008 10:05 am

    LEH is ready to pull the trigger on their CMBS sale to BLK. Like MER deal with Lone Star, clearing prices are being set. I note Soros upped his LEH stake.

  3. Greg Vinately on August 15, 2008 1:40 pm

    It will also be interesting to see how market participants will be willing to absorb CMBS in the face of today’s action in the CMBX particulalrly in the A and BBB space.

    Apparently a real estate developer from Beantown is running out of luck in Harlem.

  4. michael bonderer on August 15, 2008 2:37 pm

    Why are 2-year Interest Rate Swap spreads blowing out to over +100?


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