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Tuesday, July 29, 2008

MER or Thain its outrages

Thain (CEO of Merrill) plans to compensate Temasek with 2.5 bil - is he out of his freaking mind. Thats the guy who said MER does not need any new capital a few weeks ago over and over again. He gets paid over 200 mil. for this mess. Thats a case of fraught against all other stockholders he needs to compensate them as well - happy new business for lawyers. Why is Temaseks money any better than the money of all the other stockholders. This guy together with his expensive Goldman buddies who cost the firm over 500 mio. for 3 people - that insane anyway should be fired. Any Ape can do better and Stan O'Neal belongs behind bars. This guy blew away over 40 bil. officially (actually its closer to the double amount - basically all the money MER was worth) in a year with taking risks (thats the insane dilligence of the SEC and FED to supervise them) out of any proportion. People get tickets for speeding in cars - this guys speed corporations into bankruptcies - why is there no ticket for those gentlemen. They have cost the world trillions of dollars. Instaed he walked out with 180 mio severance package - this world is completely insane. Its not only MER the same is true for all Wallstreet except Goldman - but not because they were any smarter, by Mr. Thain you see an ex-Golman CEO at work. Goldman has an information advantage over all other firms - their flagship algorithmicly driven hedge fund lsot almost half their money lst year. This whole mortgage related issue is ahuge Enron on a exponential scale, with Rating Agencies mortgage brokers and Investmentbanks plling all the same string or scheme - all Mr Bush had to say about this was that Wallstreet is drunk. I think someone is using his own desease to desribe other people. Imagine that Mr Bush has an MBA from Harvard but thats a complete different topic - nevertheless like his Dad 'read my lıps' - he is famous for his smerking smile while reading bad news to the nation. The most amazing to me is that nobody shouts foul but on the other hand no suprise the majority of all stocks are controlled bu mutual funds who are not interested in their clients money or ethics. They are part of wallstreeet themselves who will not attack the people who feed them- allthough its actually the clients money but their loyalty is with the people who gave them their jobs.

Excerpt from Bloomberg

Merrill to Sell $8.5 Billion of Stock, Unload CDOs (Update2)

By Bradley Keoun and Christine Harper

July 29 (Bloomberg) -- Merrill Lynch & Co., the third- biggest U.S. securities firm, will sell $8.5 billion of stock and liquidate $30.6 billion of bonds at a fifth of their face value to shore up credit ratings imperiled by mortgage losses.

Temasek Holdings Pte., the Singapore-owned fund that became Merrill's biggest investor by acquiring shares in December, will buy $3.4 billion of the new stock, Merrill said yesterday in a statement. The New York-based company is paying Temasek $2.5 billion to offset losses on its earlier investment. Merrill will also book $5.7 billion of writedowns in the third quarter.

2nd part

MER sells 30 bil. of CDO's at 22 cents does the financing and adter 1.7 bil. they participate in the losses again, sells Bloomberg to Bloomberg at discount and finances the deal for Bloomberg - what kind of crook deals are that? At the same time they diluted completely the old stockowners assets - first the destroyed capital, now they make presents and finally they brought in fresh capital with close to no earnings power left - even the worst enemy could have not done any better. Mr. Paulson and Mr. Bernanke who claimed one year ago everything was contained and losses would be around 50 bil. probably only referred to MER?? All this other 'economists' who came up with the mantra this is a selective problem of wallstreet and real-estate speaking of the two backbones of the economic strength in the last 4 years are they just incompetent or bad liars. They keep it up stating that earning after this two sectors are still doing good - mostly thanks to the 'strong dollar' policy of the white house and underpaying the workforce by faked inflation numbers and cooked balance sheet components.

Did you know that most corporations 80 plus % have a fictive profit component which is the corporate retirement funds. It works quite easy you are allowed to assume a figure of 111110% profit for a fictive size of the retirement budget which is mostly not fully paid in even with huge underfunding and add this fictive profits of fictive sums to the earnings. Since decades the earnings were inflated by this numbers - so all this fancy valuation models have a lot of this faked components which make them an unreliable source of evaluation. Finally eve,rybody who claims stocks are cheap especially pulling statistics from the last 10-20 years has no good intentions because thats not a reference period by any means. That is why abby Cohen from Goldman is a 'obscure' lady with her fair valuation claims. The FED model as I explained in a former post is also based on completely false assumptions because without real inflation ,no real bond yields and finally that is what counts.

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