Merrill Fired Analyst Who Angered Huge Bank Clients Before Financial Crisis, Says Michael Lewis

[harun]

Source: Henry Blodget

In a new article in Vanity Fair, Lewis tells the story of an analyst at Merrill Lynch who, months before the crisis, said the lending practices of several big Irish banks were the riskiest and most reckless in Europe.

The Irish banks freaked out when they saw the report and demanded that Merrill retract it. Merrill DID retract it, and then rewrote and re-issued a version that was far more flattering to the Irish banks. And at the end of the year, the analyst was canned.

Of course, several months after the report appeared, the financial crisis hit and the Irish banks collapsed.

Lewis's story suggests that it's still far riskier for a Wall Street analyst to be bearish and right than bullish and wrong.

Read more: http://finance.yahoo.com/tech-ticker/merrill-fired-analyst-who-angered-huge-bank-clients-before-financial-crisis-says-michael-lewis-535889.html?tickers=XLF,FXE,IRE,FAZ,AIB,EIRL,EUO&sec=topStories&pos=9&asset=&ccode=

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Best line in the piece is about how it is still far riskier for a Wall St. analyst to be bearish and right than bullish and wrong. If Obama can change even one thing about Wall St. that would be the one thing. There are smart and ethical people on Wall St. but there are more powerful people who will fire them for being right and/or ethical when they don't like it.

(If this should have been posted in editorials please move, thought it was big news though so posted in LBN)

[RandomThoughts]

1. That is the problem the perception that they have more power.

Here is the structure of the world.

Most people wanting the world more fair, justice with compassion.

A few people stuck in organizations not like that, but their actions help with that cause.

Then a few that don't care about anyone, that go after everyone that does better.



The sad part is that it becomes very difficult to even compliment someone, since the blockers in people decide much of how they see things.

That is why I am trying to point out you can choose how to see things, and how to get by your blockers, your blockers is what stops you.


For instance, I disagree with much of the writings of Joss Whedon, and do know he has been kicked around a bit, but his stories have many of the better thoughts to heal the land in them. But if I post support based on seeing past blockers, many only see the blockers and think it is a bad comment on him.

So to make the world better, there has to be a way to help people get by their blockers, to find better thoughts in things.


There also has to be a way to get beer and travel money, and that is still due, so I understand the concept you post.



There is a group that does not want better thoughts getting out. That is why when you see past the blockers, and see the wonderful stories, trying to get them out is so important.

[Vinnie From Indy]

2. I hope nobody forgets the role of the ratings agencies like Moodys

in this whole mess. Most every one LIED about the risk to the general public and yet not a one as I know has been chraged with a crime. It seems everyone that knew what was happening was either bought off or fired.

[harun]

3. I think the new ratings agencies were much more to blame than

Moody's. For example if someone was not getting the rating they wanted from Moody's they would shop rating agencies until they got the rating they wanted. The rating agencies then felt pressure to rate a certain way to keep relevant. Totally corrupt and the gov't should have jumped all over it at that point. They didn't, they cheered it on.

[xchrom]

5. there is a special place in hell for ratings agencies. nt

[RUMMYisFROSTED]

6. AAA hot.

[xchrom]

7. ...

:spray:

[applegrove]

4. That is so true.

[Uncle Joe]

8. Kicked and recommended.

Thanks for the thread, harun.