Friday, June 27, 2008

"But they made a bigger mess!!"

Merrill Lynch & Co will likely incur $5.4 billion of write-downs in the second quarter, mainly from its exposure to monolines, said an analyst at Lehman Brothers, who also saw higher quarterly losses at the world's largest brokerage.

Citigroup Inc shares fell to their lowest level in nearly a decade after a Goldman Sachs & Co analyst said investors should sell the largest U.S. bank's stock short as losses mount from troubled debt.

Barclays Plc may need to raise a further 9 billion pounds in capital, according to analysts at Citigroup, who also said the British bank could take further significant write-downs as credit market conditions continue to deteriorate.

Analysts at Goldman Sachs and Sanford C. Bernstein said they expect Merrill to post its fourth straight quarterly loss from its exposure to collateralized debt obligations (CDOs) and hedges.

J.P. Morgan Securities said it expects Merrill Lynch & Co Inc to post a loss in 2008, and substantially cut its second-quarter view for the Wall Street investment bank mainly due to ineffective hedging, slower client activity and likely writedowns from monoline exposures.

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Notice a trend here? Banks are scrambling to make sure everyone knows the 'others' are doing much worse. Their own bank is of course "very capable of weathering the credit crisis, has a substantial capital base, is increasing its presence significantly in the emerging markets, has successfully diversified their portfolios further, bla bla bla." What a bunch of spoiled kids... Just put your head down in disgrace, fix your shop and hope the axes of regulations and lawsuits don't come crashing down on you.

Sunday, June 8, 2008

Wise words from my hair dresser

Some time ago when I was getting a haircut I had a very interesting conversation with my hair dresser about choices of profession in life and how it was always affected by certain factors such as salary, status, etc. Very often people don't really choose their job only because of their interest in it. She asked me a question everyone should ask themselves; "Which job would you do if every job required the same number of working hours and they all provided the same salary?". Even though it's not realistic at all of course, (there are many more factors which influence a job position, such as responsibility, accountability, etc), it can still lead to very interesting outcomes. I asked some of my friends and quite a few have no idea, but what I found surprising is that most of them do not pick their current job! So maybe you should ask yourself that question and who knows you might end up doing just that in the future. I would appreciate it if you could post a comment with what your current profession is and then what your answer would be to the above question. Should be interesting!