Why I’m buying puts on Merrill in the morning

From an interview between Maria Bartiromo and Merrill CEO John Thain. This is the section that has financial blogs incredulous.

Bartiromo: Will you need to raise additional capital?

John Thain: …Unless you tell me where asset prices are going to go over the next six to twelve months, I can’t answer that question.

Bartiromo: So you’re not going to say categorically — you’re not going to put yourself in that corner again?

Thain: Well, no… If the world stays the way it is, if asset values don’t decline, we will definitely not need to raise more capital.

Gosh, how could the billions in toxic garbage that Merrill has on the books at inflated values ever drop further in price? Bonus points will be given for correctly answering how many times Thain has previously said Merrill won’t need to raise more money.


  1. You lost. You forgot that everybody already knew that Merrill could not avoid the same writedowns that everybody else was taking. Only a sucker would have believed Thain. Look at Paulson and Corzine they are all from the same factory. Smart guys with agendas always dissapoint.

  2. Who said I believed Thain?

    As for buying those puts, I didn’t yet. I’ll let the bear market rally party a bit longer first. When I buy, I generally go 5-6 months out at or slightly in the money.

    Yes, absolutely. Goldman consistently outmaneuvers everyone else.

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