Monday, May 18, 2009

Long Shot

How could we have avoided the subprime crisis and the Madoff mess? Better regulation. Not more regulation but smarter regulation. Even though getting there is very much the focus of the folks now in charge, I am not overly optimistic that it will happen.

"May 18 (Bloomberg) -- BlackRock Inc. and Bank of New York Mellon Corp. are competing to become the world’s biggest money manager as stock markets show signs of recovery.

Each company is in talks to buy Barclays Plc’s fund unit, whose $1.5 trillion in client assets ranks highest in the industry.."

As the above Bloomberg report points out, BlackRock or BNY will likely to buy Barclays' asset management division, which is 100% for sale. I don't have much experience with BNY but I know for a fact that BlackRock is a very smart company. Part of the genesis of the subprime mess was that the investment banks packaged lousy loans into complex time bombs that neither the customers nor the ratings agencies could understand (or maybe they didn't take the time to).

Is it possible that there could be a customer so big that it plays to role of cop in the marketplace?, i.e. don't even bother if you can't sell it to BlackRock?

Probably wishful thinking.


I woke up at 5:30 and I'm running late already. Great tone to the futures this morning.


Morgan Stanley just ungraded semis and semi equipment. Nothing new in the upgrade, nothing new to stop these stocks in the intermediate term.

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