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Sep 11, 2008 5:22 pm

I have been offered a job by Smith Barney, but I am worried about what is going on with Citi. Has anyone heard anything about how the gigantic losses will affect Smith Barney?

Sep 11, 2008 9:04 pm

If you are worried about Citi, then you should get a job outside the industry. They will be one of the players still standing when this is all over. ML has written off a smaller $$ amount that Citi, but a much larger amount as a % of their equity.

Sep 11, 2008 10:28 pm

Anybody out there wondering what’s going to become of MER?  I’m a veteran MER producer, typically a very strong supporter of the firm as they have been very good to me.  But I don’t know what’s going on now----the firm’s fundamentals have not changed enough in the past month to merit a 30% drop in stock price, not to mention the 80% drop we’ve seen over the past 24 months.  While I am very loyal to Merrill, I don’t want to be left holding the bag if this thing implodes.  And to compare MER to LEH is like comparing PFE to CSCO.  Completely different business models.

Sep 11, 2008 10:56 pm

The fact that the ML pfds are trading down to 14 and change is pretty telling. They have written down so many $$ relative to their size that i think it puts them in a precarious position

I think the last couple of months taken in total is a watershed event for the industry in general and the wirehouses in particular. This is going to destroy whatever transactional brokers are still out there practicing. The closed end business has been gone for a while. It will come back but not for a while. The pfd syndicate biz is gone, who knows how long that will take to come back if it ever does. Those two businesses together account for an awful lot of gross for most branches. I think the stratospheric deals are going to go away soon. The firms cant justify it any more. Branches will be smaller, there will be less people in management, and the trend of wirehouse FA's going indie will continue and grow. JMHO
Sep 12, 2008 10:59 pm

The preferreds don’t really have much to do with this, as far as I can tell anyway.  Punch up the symbol BSC.X.  This is a Bear Stearns preferred.  Certainly, you would expect that this thing would be trading at 0, or close to it, based on the fact that BSC went under, right?  Well, it’s trading above $22, close to the $25 par level and way above the $12 level where it closed on the day before BSC was bought by JPM.  And look at LEH.L today…it closed UP on the day while LEH was down another 13%.  And LEH.L was up yesterday too!  The preferreds have nothing to do with this, since the preferred holders need to be taken care of before the common holders get a dime.  But I am still very concerned with MER and would love to get an educated answer, since senior management is telling us nothing.  I really thought we would hear from Thain or McCann by now.

Sep 13, 2008 2:32 pm

Wasn’t there a story a few months back about the CEO of MER approaching the CEO of WB behind the scences about doing a deal together? Didn’t he get fired because the news leaked out and he did not have the boards approval to approach WB for a deal?  Anyhow,  I see alot of M & A activity on the horizon. Time to scoop up some of these guys when there price is so low. Hopefully JPM will take WB.

Sep 14, 2008 10:51 pm

Well, I guess O’Neal was ahead of his time, he started it and the U.S. Govt finished it!

  I take back what i said about not worrying about Citi. I guess we need to worry about everyone!