Merrill Lynch (MER) Conference Call Highlights
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Below are some interesting comments regarding Merrill Lynch (NYSE: MER) from John Thain:
"The widening of credit spreads forced liquidations, high volatility, the lack of market liquidity for many credit products is probably as difficult a quarter as I've seen in my 30 years on Wall Street. And in that context, we generated 7.4 billion of revenues before marks and fair value gains. In a number of our businesses, we did very well."
Thain noted that in this environment Merrill Lynch was still able to add $4 billion in net new money, $1.3 billion came from the acquisition of First Republic. Merrill had record trading revenues in currencies, almost double from the year ago quarter. Merrill had $82 billion in cash at the end of Q1.
Thain made a remark to the bloggers (and maybe CNBC's Charlie Gasparino) on the call, "And for those of you who like to blog, we do not have any plans to raise any additional common equity." But, as Gasparino reported Merrill could still potentially raise debt.
Merrill had $1.5 billion of net write-downs on ABS CDOs. "We moved our accumulative loss assumptions on subprime mortgages from what was a range of 16 to 21% at the end of Q4 to a range of 19 to 24% at the end of the first quarter. And remember, at 24%, that would mean that if half of the mortgages defaulted, you would lose a 48% of the value of the home. So very, very significant price declines. And just in terms of the average over the U.S. so far, year-over-year home prices are down about 11%, although subprime in certain areas are down more than that."
Merrill hasn't used the fed facility in any meaningful way. And, as already noted Merrill plans to reduce head count by 4,000. [jt]
Track MER At EasyStockAlerts.com
"The widening of credit spreads forced liquidations, high volatility, the lack of market liquidity for many credit products is probably as difficult a quarter as I've seen in my 30 years on Wall Street. And in that context, we generated 7.4 billion of revenues before marks and fair value gains. In a number of our businesses, we did very well."
Thain noted that in this environment Merrill Lynch was still able to add $4 billion in net new money, $1.3 billion came from the acquisition of First Republic. Merrill had record trading revenues in currencies, almost double from the year ago quarter. Merrill had $82 billion in cash at the end of Q1.
Thain made a remark to the bloggers (and maybe CNBC's Charlie Gasparino) on the call, "And for those of you who like to blog, we do not have any plans to raise any additional common equity." But, as Gasparino reported Merrill could still potentially raise debt.
Merrill had $1.5 billion of net write-downs on ABS CDOs. "We moved our accumulative loss assumptions on subprime mortgages from what was a range of 16 to 21% at the end of Q4 to a range of 19 to 24% at the end of the first quarter. And remember, at 24%, that would mean that if half of the mortgages defaulted, you would lose a 48% of the value of the home. So very, very significant price declines. And just in terms of the average over the U.S. so far, year-over-year home prices are down about 11%, although subprime in certain areas are down more than that."
Merrill hasn't used the fed facility in any meaningful way. And, as already noted Merrill plans to reduce head count by 4,000. [jt]
Track MER At EasyStockAlerts.com
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