tag:blogger.com,1999:blog-3782644139927778760.post-36048782165081903682007-10-27T09:27:00.000-04:002007-10-27T09:27:00.000-04:002007-10-27T09:27:00.000-04:00Merrill is in rough shape, and it has a lot to do with O’Neil’s own folly and lack of sound risk management policy. I think it is clear he was trying to save Merrill (or at least get the best package for its shareholders sooner, rather than later). The reason is that Merrill’s stock price is going to collapse. Folks – the game is over on Wall Street. With the credit crunch, all of a sudden the revenue streams for these firms (Merrill, Morgan Stanley, Goldman, JP Morgan) are drying up, with little hope in sight for a turnaround anytime soon. <BR/><BR/>If I were one of these large institutions, I would put together the most crack group of asset divestiture, bankruptcy, and business reorganization team in town. This is where the booming business is going to come, from shoveling the ashes of the next wave of America’s failing economic fortunes off the ground. Think GM, Ford, a few supermarket chains, Sears/K-Mart, multiple mid-cap manufacturers. This next downturn is going to expose how frail so many American companies are since we have opened up our markets to competition from low-cost countries. They have slowly declined, and this folks, is finally going to kill them. As such, there is going to be a lot of demand from bankers and consultants to help investors salvage pennies on the dollar from these corpses. <BR/><BR/><BR/>Since Merrill is not known as a powerhouse in the investment banking world, and is more a wealth-management powerhouse for the mildly-wealthy, upper middle-class types, its outlook is bleak. I think O’Neil knows this, and lo and behold, was trying to get the deal put together before the share price drops so low, they become a takeover target by….Bank of America or Wachovia itself.Bradnoreply@blogger.com