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’Signal failure
One cannot fault the Chinese walls at Merrill Lynch, joint corporate broker to Invensys.
We have upgraded Invensys to a Buy, with a price target of 285p. While pressure on Controls will potentially continue in the short term and H2 Rail margins could be at risk,
Don’t forget the advisers
Alternative title: The bull that got away.
Everyone else has got it in the neck for the failure of RBS, so it’s only right that we remember those who masterminded the disastrous acquisition of ABN Amro.
The curse of the UK IPO strikes again
Barely six weeks after chief executive Jim French confirmed guidance and described forward tickets sales as encouraging, Flybe, the regional UK airline, has issued another profits warning.
Flybe’s press release:
A US recession indicator
Interesting chart from Ruslan Bikbov at BofA Merrill Lynch.
As you see the yield curve has proved to be a very powerful recession indicator. So why is Bikbov drawing our attention to it now when the 2s5s curve is 74bps – 29 bps above its long term average?
The answer runs as follows.
The Bank of America “de-layering” bloodbath
Well, this is one way of trying to show that you’re in control and that Merrill Lynch is absolutely, totally, honestly, really, not going anywhere.
Here’s the top of the statement released by BofA on Tuesday evening:
Will Dow Jones please return five minutes of our time
Compare:
BOfA Merrill-Lynch Distributing Sales Docs Among Bidders-Source
Contrast (minutes later):
Bank of Spain’s advisor in the sale, Bank of America Merrill Lynch is distributing sales documents w/ potentially interested bidders.
Fannie and Freddie’s revenge — the details [updated]
– By John McDermott and Cardiff Garcia
The details of the US government’s attempted bank raid are coming in on Friday afternoon.
The Federal Housing Finance Agency has filed 17 lawsuits against banks operating in the US.
The EM retreat continues
And so… the rotation out of EM equities into DM equities goes on.
Data from Citigroup:
So, in the week to February 16 outflows from emerging market funds totaled $5.45bn, up from $3bn just the week before.
Raging bulls
And the overwhelming theme of the latest BofA Merrill Lynch fund managers survey is…
Complacency.
From record equity and commodity overweights…
Equities & Commodities Rule
Asset allocation is straightforward and extreme:
The missing bits from Merrill’s Ireland note
Last week, Michael Lewis brought you his take on Ireland, a Vanity Fair epic on the nation’s real estate and banking bust. He also brought us the story of Philip Ingram, a zoology student and former Merrill Lynch banking analyst.
Merrill’s scrubbed Ireland note
It was here. But Merrill wanted it taken down. Bye By, Philip Ingram’s research.
Merrill’s missing Ireland note
One of the most damning bits of Michael Lewis’ “When Irish eyes are crying” article concerns a zoology student, ‘business relationships’ and a missing Merrill Lynch note.
Here’s the extract via Barry Ritholtz over at Big Picture:
The bid story that won’t go away
More on those Smith & Nephew bid rumours, this time from Merrill Lynch, whose investment bankers have reportedly been trying to put the medical devices group together with a heavily indebted US rival.
Taking the corporate hospital pass
Yell has a new chief executive. His name is Michael Pocock and in a previous life he was the boss of Polaroid* which he managed to nurse back to profitability and eventually sell.
Presumably he will
Adventures in de-equitisation
The latest corporation looking to take advantage of the yawning gap between earnings yields and (after tax) debt yields is IBM.
Via Reuters:
IBM SAYS AUTHORIZED $10 BILLION IN ADDITIONAL FUNDS FOR
Knowing your rights
From the FT, January 2010.
Ask shareholders which rights they treasure most highly and many say it is their right to pre-emption, which protects their holdings from being diluted by new share issues.
What then,
They think it is all over…
… it is now.
Well, sort of.
We are hearing KNOC and its advisers Merrill Lynch swept the market for a 29.9 per cent stake in Dana Petroleum on Friday morning. The trades haven’t printed yet but they will.
Pyxified, Merrill’s subprime sink
Have you ever heard of Merrill Lynch’s Pyxis CDO/SPV/Insert Structured Finance Acronym?
It’s confusing a lot of people this week, after the NYT’s Louise Story exhumed the deal, which she says was a way for the bank to shift its subprime exposure off-books.
Pay (I)TV
Shares in ITV, the UK’s biggest free-to-air broadcaster, are under pressure on Wednesday.
Merrill Lynch has done the damage, cuttings its recommendation to “underperform” because it believes ITV’s forthcoming strategy review won’t address the fundamental limitations of its business model.
[MoneyTech] Google and Twitter v the investment banks
How do Wall Street’s lawyers and lobbyists find the time?
Somehow, while fending off the complaints of munis burnt by derivatives, contending with proposals to overhaul the US financial system and worrying about the SEC poking around,
[Abacus] Understated Research Headline of the Year, Part II
Hello criminal probe, goodbye hard-earned reputation — and, er, about seven per cent off Goldman Sachs’ stock, as at pixel time.
This note from a Merrill Lynch analyst says it all:
We are lowering our rating on GS to Neutral from Buy and our price objective to $160 from $220.
CDS report: Banks and airlines drag market down
Financials took over from sovereigns as the negative catalyst du jour, pushing spreads wider across the board. The bearish sentiment triggered on Friday afternoon by news that Goldman Sachs had been charged with fraud gathered momentum over the weekend and continued today.
BAC gains on Merrill’s deterioration in Q1
Here at FT Alphaville, we do like to cover the effects of gains and losses stemming from changes in banks’ own debt quality.
These, as we’ve written before, are known as CVAs: credit value adjustments.
The (alleged) minus $50bn man
His name is Alberto Cribiore. He’s a former private equity practitioner and he sat on the board of Merrill Lynch before it was sold to Bank of America.
According to a Fortune piece by House of Cards author William Cohan,
Exiting Lloyds and RBS
How do you square this circle? The government wants to sell its stakes in Lloyds Banking Group and RBS, but wants to do so in a way that maximises taxpayer value.
One way, according to an article in the Sunday Times,
Lloyds could double, says Merrill
Merrill Lynch has attempted to upstage Lloyds boss Eric Daniels, who is appearing at Morgan Stanley’s European Financials Conference later on Wednesday.
Merrill’s banks analyst Michael Helsby is telling clients that Lloyds’ share price could double — yes,
‘A rate hike would be bullish’
Here’s an arresting graphic from Merrill Lynch’s chief global strategist, Michael Hartnett.
It shows short term interest rates during the US depression and Japan’s lost decade:
So why the history lesson?
Well,