Would a "prudent man" invest in Merrill Lynch?

Discussion in 'Wall St. News' started by wilburbear, Sep 14, 2008.

  1. Yes, I was the one who called for Fuld to step down, when people were talking about "following him to the gates of hell." Today the media is calling for his head on a platter.

    New topic. Merrill Lynch is more highly leveraged than Lehman. If anyone you invest with provides Merrill with a "capital infusion", or continues to use them as a counterparty in financial transactions, you may want to consider legal action against them. MER's leverage problems, and it's declining financial condition are well known.
  2. By Warren Buffett criteria that he's listed, arguably none of the investment banks are a prudent investment. The reason is their opaque balance sheets and high leverage - you simply do not know your true exposure.

    Thus a truly conservative investor would not buy MER at any price.
  3. I posted this about an hour before it became known that BAC and MER may be in talks.

    BAC shareholders may want to consider legal action to prevent this move, unless this is a "takeunder" for less than MER's close on Friday. It is well-known that Paulson has asked major Wall Street players for funds to work out the current crisis. Arm-twisting is also going on. But why should BAC shareholders now be forced to throw good money after bad?

    It's admirable that Paulson no longer relies on the taxpayer to clean up the mess. But, he's just found a new, diverse group of voiceless people to pick on - big bank shareholders.