Merrill to extend losing streak

Discussion in 'Stocks' started by ASusilovic, Apr 16, 2008.

  1. Merrill Lynch will report $6bn-$8bn in new write-downs on Thursday and is now readying a cost-saving plan that includes job cuts of 10%-15% in some moribund business areas such as bond finance, reports the WSJ, citing a person familiar with the matter. The move would bring Merrill’s total writedowns since October to more than $30bn and mean the bank reports a third straight quarterly net loss, the longest losing streak in its 94-year history.

    I can not count anymore the billions in writedowns....I cannot even remember how many BILLIONS they wrote down last quarter...anybody else on this board having these kind of "blackout"? :D
  2. Suss----It's only a "blackout" if you are "long & wrong". :cool:
  3. Nazz,

    I am missing some volatility in the last couple of days....VIX much too lazy....can you offer me a little bit more adrenalin markets? :p
  4. [​IMG]


    what do you think about this chart ? :)
  5. 1) Suss, the chart-link isn't there. :confused:
    2) This option expiration week ought to be calm. :cool:
    3) The end of next week and the last days of April could have some decent window dressing and undressing. :eek:
    4) Get your gal-pal Meredith to issue more bank-related research in the near future. :p
  6. Suss-----I'd like for the chart to be bullish because it indicates excessive put-buying AFTER the market has stabilized. The market might do a "Buy in May, go away, stay sober, til October rally". We'll see. :)
  7. "Brass balls" Meredith ? Ha, ha, ha....Analysts come and go...she had her "superstar minutes"....remains to be seen whether she will keep up with "quality research"....

    Regarding bank related research :

    Please see attached our latest Strategy Matters and Options Research on the banks sector. The key points of our strategy piece are:

    We reduce the size of our Underweight position in European banks as factors such as improved liquidity, tighter credit spreads and successful capital raisings may provide short-term support for stock prices. However, we remain Underweight as challenges for profits remain, and we expect the sector to underperform in the longer term.

    Reducing the size of our Underweight banks position
    We have been Underweight European banks since September last year. While we remain Underweight, we acknowledge some near-term supports for sector performance and we therefore reduce that position by 100 bp. We now recommend 17% vs. a market weight of 18.4%. Banks is now our smallest Underweight sector. For zero-premium hedges against a further bank rally please see Considering All Options also published today by our Options Strategy team.
    Near-term supports: Capital raisings, credit spreads, liquidity
    We believe banks could continue to enjoy a bounce short-term. Near-term performance could be supported by recent capital raisings, a tightening of credit spreads and improved liquidity after recent Fed interventions. However, given the recent rally has already been supported by all of these factors, the near-term upside to fair value is now more limited, in our view. We continue to focus on the longer-term headwinds for the sector.
    But longer term underperformance to resume
    In the longer term, we believe the banks sector will continue to underperform, supporting our structural Underweight stance in our European portfolio. We believe banks will come under pressure as (1) they are increasingly forced to consolidate activities and return to more traditional banking models, which will hamper growth, (2) increased future regulation is likely to result in weak profit growth, and (3) valuation has not adjusted back to the levels seen during the 1990s and the recent rally does not now support sustained outperformance.
    European banks: Stock opportunities
    For investors wishing to reduce their Underweight position, we highlight stocks rated Buy by our banks analysts. They focus on three key themes: diversified growth, back to basic banking and mean reversion.

    Have fun !

  8. A three sentence summation would have been sufficient. :(
  9. Sorry,

    it´s easier to copy and past....:) :D :p
    #10     Apr 16, 2008