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Is Merrill Lynch really the place to be?

Merrill Lynch is attracting some heavy hitters from rivals. Is Thain really about to turn things around, or is he just opening the Merrill cheque book?

First came Thomas Montag, former head of sales and trading at Goldman Sachs. Then came Peter Kraus, former head of Goldman’s investment management unit. Now comes Caroline Silver, former vice chairman of investment banking at Morgan Stanley.

Is Merrill really that hot?

Probably not. The bank has spent the past three consecutive quarters in the red and according to the analysts at CreditSights may well have further writedowns to come.

Are Montag, Kraus and Silver in it for the opportunity to make their mark in a turnaround situation? Or are they simply trying to gain from Thain’s largesse? Let us know below.

Comments (12)

  1. Me and 4000 dear colleagues have just been canned from ML. As one headhunter pointed out to me, all those ‘cost savings’ will largely be taken up by Thain hiring Montag and few more of his ex-GS buddies….
    Yes I’m bitter, but no, ML isn’t that hot.

  2. This doesnt seem logical to me, not logical at all! But then whenever financial markets or players are ever rational or logical?

  3. I do beleive that M L will still have alot to writedown for 08. So even though, ML are employing FAT CATS, how much of an impact can they have in less than a year?
    I think 09 Finacial Report will have more to do with the FAT CATS abilities to revive ML PROFIT.

  4. is anyone in todays climate really worth the money thain/ml is paying to these guys – senior management seem to have been the causes of these recent problems, by not identifying then applying neccessary actions to control the risk exposure. it is now general consensus that greed covered the eyes and ears of these senior guys. Now we here of huge packages to bring in more people at this level, after the pay off to stan – i would be appalled if i was a shareholder. what do the shareholders think ??/ as an investor myself i am now shorting ml stock expecting it too fall much further. They should hand the control to these busineses over to producing managers who wish to renmain producing managers. people who have the day to day feel of what is going on and can act quickly. not reporting into people in ivory towers who have already made there money –
    if there were comitted to the growth of the business and truly believed there skill sets would add value – with there already consdierable worth why dont they
    a/ tell us how much ml stiock they have bought on joining (not gifted)
    b/ not take any income but have an all option deal –
    that would sort the men from the boys

    beginning of a new cycle Reply
  5. The slash and cash grab of the bull is back.Bringing in big hitters is just Thain’s way of levelling the structure so he gets to spread the blame wider and avoid an early bath when the next blow up or black hole thunders through the books.There’s no real evidence that they’ve got a handle on their risk and have lost so many key people it has to hurt. I’ll be surprised if the firm is back in the black this year.

  6. ML is no different from the other wunches.

  7. Come on Merrill!!!

  8. I’m also one of the recent 4000 departees from ML. The IT systems simply aren’t there to help desks make timely decisions. Further writedowns are inevitable.

    Shaken, not stirred Reply
  9. I would rather be at ABN than ML currently

  10. “Stan’s payout” referred above was actually his severence (his stock). Lets be clear, guys – he was fired and got what he’s owed upon dismissal – his stock award, which vested immediately. Go Merrill!

  11. it’s all down to flawed thinking. what on earth is anyone really going to achieve in these times of uncertainty. bringing in big hitters is a pipe dream to nothing. as with everyone in the market at the moment, you may have a job today but tomorrow is another day and it will be like this for some time.

  12. The problems all come from the lack of corporate governance. Having a joint CEO/Chairman and a risible board (compare ML’s board to GS’s), Stan O’Neal was able to overrule everyone in his lurch for glory. Sadly for all of us his shortsightedness (not a problem affecting his golf handicap it should be noted) has land us where we now are. He has a moral duty to forgo his termination payment. Needless to say he doesnt have the moral backbone to do it.

    Regading Thain, I think he really is the Great Last Hope, and he’s got my whole hearted support. As for Montag et al., let them come over, we (the sahreholders) are paying for them in stock, so the dilution isnt that bad. If they can help turn the beast around, so be it.

    Research Analyst, ML Reply

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