Merrill's credibility and stock take hit

Source: Reuters

NEW YORK (Reuters) - Merrill Lynch & Co Inc.'s credibility and stock took a big hit on Friday after reports said the biggest brokerage sought to delay billions of dollars of losses on troubled assets by moving them to hedge funds.

Renewed worries about U.S. banks' exposure to subprime mortgage-related assets punished financial stocks across the board on Friday.

Merrill, which does not have a chief executive after the departure of Stan O'Neal earlier this week, led the declines, which knocked about $4.3 billion off its market capitalization.

Merrill had its biggest drop in 18 years, falling as much as 12 pct Friday morning, before the company said that it was not aware of any inappropriate transactions. Merrill's stock closed down 7.9 pct, or $4.91, to $57.28.

Read more: http://biz.yahoo.com/rb/071102/merrilllynch.html?.v=2

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The house of cards is collapsing.

Merrill Lynch got caught it seems. I've read there are class action lawsuits underway already and that Merrill Lynch was said to be the "next Enron" I read.

By shifting the toxic stew over into their hedge funds, they can escape SEC scrutiny for "questionable accounting practices."

and many people lost a sh*tload of money the last couple of weeks.

It sickens me.

The former CEO (O'Neal) walks away with a multi-million $ pension while the people that have been faithful investors of this "company" have lost billions of dollars!

:kick:

Most investors think the CEO's compensation should be tied to the company's performance or to certain benchmarks and objectives, but with the way many corporations are set up, the members of the compensation committee are, in many cases, recommended by the CEO himself into those positions, so as you can guess, he has a tremendous influence over setting his own compensation package. This is, unfortunately, pretty standard with a lot of Fortune 500 companies.

If they believe in the free market so much, then the market should be allowed to make them pay whenever they make reckless investing decisions, but often times the government, influenced by these firms, bails them out, and then they have golden parachutes if the government doesn't help anyway. Both basically short-circuit the rules of the game, and you're the one that gets tossed under the bus.

Part of Bush's Hitler Nation

Level 3 storm about to hit Wall Street
By Martin Hutchinson

There's a mystery on Wall Street. Merrill Lynch wrote off $8.4 billion in its subprime mortgage business, a figure revised up from $4.9 billion, yet Goldman Sachs reported an excellent quarter and didn't feel the need for any write-offs. The real secret of the difference is likely to be in the details of their accounting, and in particular in the murky world, shortly to be revealed, of their "Level 3" asset portfolios.

<snip>

http://www.atimes.com/atimes/Global_Economy/IK03Dj03.html

and the other investment firms showed huge losses. Makes you go hmmmmmmmm