Still trying to understand Merrill’s recent dealings? These articles help clarify any remaining confusion (or maybe it’s only me). – Ilene
Pot admits Kettle obviousness
Courtesy of Greg Newton at NakedShorts.
NakedShorts’ Obviousness Rule rule states that, even if things are obvious, they are not officially true until some official writes for, or talks to, an official news organization to tell everybody something that everybody already knows, but doesn’t dare say.
BAC goes oooops on Thain’s CDO “sale”
Maybe next time, and there will be a next time, the boneheads impersonating analysts at pretend investment bank Bank of America might read the whole press release before giving two thumbs up to one of its competitors for hitting the eject button on rapidly putrifying drekk.
Bank of America analysts, who said yesterday the sale “suggests the endgame” for banks’ CDO risk, today wrote they had overstated the “positive implications” of the transaction…. A drop in the value of the CDOs by about a further 5 cents would wipe out the equity from Lone Star and “leave Merrill back on the hook for the exposure,” said the analysts, led by Jeffrey [Four Short Planks] Rosenberg in New York. Lone Star bought “the upside of the underlying subprime assets in the CDO pools” while Merrill retained “most of the downside,” they wrote.
A spokesman for the US Securities and Exchange Commission, citing policy, declined to confirm or deny that an investigation has opened into Bank of America’s admission that it spread false rumors in the market. (Or, more precisely, the spokesman would have, but NakedShorts saved himself the price of that particular phone call.)
Merrill Gives Up Gains, Is `On Hook’ for CDO Losses
by John Glover, Bloomberg
