So Stan O'Neal tanks Merrill for $8 BILLION & gets rewarded w/ $160 MILLION.........

[Narmer]

Originally posted by: Blackjack200
There's no such thing as an options contract on a CDO. And they didn't put "all their eggs in one basket", they were selling a lot of mortgage backed securities, but they were also still selling alot of equities and mutual funds.

Wall Street has been very creative in making contracts, so I don't see how something similar could not come about. But that's besides the point. All I'm saying is if they were making so much money on CDOs and other mortgage-backed securities, they could've just as easily hedged their bets. Sure, it would've lowered their profit, but it also would've given them an exit strategy in something that obviously had to come to an end. They should've known that they couldn't ride that bull forever.

 

[jman19]

Originally posted by: Narmer

Originally posted by: Blackjack200
There's no such thing as an options contract on a CDO. And they didn't put "all their eggs in one basket", they were selling a lot of mortgage backed securities, but they were also still selling alot of equities and mutual funds.

Wall Street has been very creative in making contracts, so I don't see how something similar could not come about. But that's besides the point. All I'm saying is if they were making so much money on CDOs and other mortgage-backed securities, they could've just as easily hedged their bets. Sure, it would've lowered their profit, but it also would've given them an exit strategy in something that obviously had to come to an end. They should've known that they couldn't ride that bull forever.

I guess you should be the next CEO of Bear/Citi/Merrill since you know so much.

There is risk involved, but there are many factors that determine how much risk different banks are willing to take on. Obviously some firms have better risk management than others, and GS was able to short at the right time.

 

[ProfJohn]

Big time CEOs are like sports stars in that they are paid for their past performances with the hope that they can repeat that magic at the new place.

Apparently that wasn?t the case here, but every time you hear about how some CEO was brought into a new company and after failing was given a huge amount of money that is the reason behind it.

 

[Mean MrMustard]

Originally posted by: Craig234

Originally posted by: Donny Baker

Originally posted by: techs
Thank God for the inheritence tax!

Yes. The gov't deserves that money! How dare he pass on that money how he likes!

:roll:

Ya - let's get rid of ALL taxes now! No one should have to pay a cent for the costs of society!

If we DO have to tax, let's tax everyone else before we ask for any money from the estates of the most wealthy.

Hmmm... I don't see where I said get rid of all taxes, but whatever fits your made up argument, right?

If we do have to tax, why can't everyone be taxed at the same rate?

 

[imported_Lothar]

Originally posted by: Blackjack200

Originally posted by: Lothar

The amount of profit Merrill was making in CDO underwriting fees were too sweet a deal for them to pass up.

Exactly, they were making so much from the CDO's they got careless. As much as people are upset at Stan O'Neal, keep in mind that this is disastrous for him. He would have made far more than $160 million if this hadn't happened, and this is a huge black mark on his reputation.

The Home Depot CEO still landed a job...

I wouldn't be surprised if O'Neal gets scooped up by a private equity firm.
Wall street has a knack for giving CEO's second chances.

 

[shadow9d9]

Originally posted by: Blackjack200

Originally posted by: Lothar

The amount of profit Merrill was making in CDO underwriting fees were too sweet a deal for them to pass up.

Exactly, they were making so much from the CDO's they got careless. As much as people are upset at Stan O'Neal, keep in mind that this is disastrous for him. He would have made far more than $160 million if this hadn't happened, and this is a huge black mark on his reputation.

Oh no! A blackmark on his reputation! How will he ever survive on his 160 million plus every previous year's salary!?

 

[Blackjack200]

Originally posted by: Lothar

Originally posted by: Blackjack200

Originally posted by: Lothar

The amount of profit Merrill was making in CDO underwriting fees were too sweet a deal for them to pass up.

Exactly, they were making so much from the CDO's they got careless. As much as people are upset at Stan O'Neal, keep in mind that this is disastrous for him. He would have made far more than $160 million if this hadn't happened, and this is a huge black mark on his reputation.

The Home Depot CEO still landed a job...

I wouldn't be surprised if O'Neal gets scooped up by a private equity firm.
Wall street has a knack for giving CEO's second chances.

I didn't mean to imply that he is done. Just realize that he probably aspires to be remembered like Jack Welsh, and instead will be remembered as the guy who almost killed a Wall Street icon. I wouldn't be surprised to see him get a second chance at all, but the stage will not be at large and the leash will be shorter.

 

[Blackjack200]

Originally posted by: shadow9d9

Originally posted by: Blackjack200

Originally posted by: Lothar

The amount of profit Merrill was making in CDO underwriting fees were too sweet a deal for them to pass up.

Exactly, they were making so much from the CDO's they got careless. As much as people are upset at Stan O'Neal, keep in mind that this is disastrous for him. He would have made far more than $160 million if this hadn't happened, and this is a huge black mark on his reputation.

Oh no! A blackmark on his reputation! How will he ever survive on his 160 million plus every previous year's salary!?

Don't mean to imply that we should feel sorry for him either. This was his own doing, and like you're pointing out, he's not exactly going to go hungry. My point is that while it may seem odd to us, he's not laughing to the bank with his $160 million. To him, this is a disgrace.

Your point that he still has a huge fortune while other were ruined in this crisis is certainly valid.

 

[DeeKnow]

Originally posted by: Lothar

Originally posted by: Narmer
Has there been a single firm that's made a profit off of this sub-prime mess? No.

Goldman Sachs posted a 79% profit increase.

that's what they claimed... if you read all the details, you will see that there is no simple way to 'calculate' the 'profit' on these instruments... essentially, what they said was ".. if we understand how this thing works, we figure we are x million ahead..."

there's many many billions more of losses to be declared, and many more top management jobs to be lost. keep watching this one.. if you are dumbfounded now, you will hurt your neck from shaking your head in 6 months time.

 

[imported_Lothar]

Originally posted by: DeeKnow

Originally posted by: Lothar

Originally posted by: Narmer
Has there been a single firm that's made a profit off of this sub-prime mess? No.

Goldman Sachs posted a 79% profit increase.

that's what they claimed... if you read all the details, you will see that there is no simple way to 'calculate' the 'profit' on these instruments... essentially, what they said was ".. if we understand how this thing works, we figure we are x million ahead..."

there's many many billions more of losses to be declared, and many more top management jobs to be lost. keep watching this one.. if you are dumbfounded now, you will hurt your neck from shaking your head in 6 months time.

I don't anticipate GS doing more writedowns than C or MER at this point.

http://www.bloomberg.com/apps/...chive&sid=arrVbMrkpyTs