Big Drama On the Street

Hurry up and wait, today big decisions are on ice as everyone plays the fed waiting game.

A smattering of earnings announcements might keep you busy, but Greg Ip's appearance on CNBC has us second guessing Bernanke & Co.'s move tomorrow. Ip is in the zero or 25 b.p. camp, which is not something we had given any real credibility. And new lows in the Case-Shiller home price index might not matter, other than leaving home builders twisting in the wind like traders today.

Meanwhile, the soap opera at Merrill Lynch is picking up speed. The ouster of O'Neal might lead to the next big battle as the factions struggle to get their guy into the corner office. Yesterday it appeared the bankers might well have their way, and a power sharing arrangement between Bob McCann and the Greg Fleming was our odds on favorite.

Based on the current quote some analysts argue that you are buying the money management operation and getting the rest of the bank for free, but the stock continues to waffle as the top brass circle each other in the ring. Will Merrill be able to work it out?

By the time you read this Stan will likely be on the back nine at Shinnecock as he moves on to his next act. Still, executive pay remains a lightning rod for shareholder activists, and Merrill will have to decide if it can afford Fink and pay out O’Neal without setting off a firestorm.

Meanwhile we are getting ready to fade any ramp tomorrow, as our model calls for net exposure to move lower in the event of a fed induced spike, and get us closer to crawling into bed with the bears. We will try to sidestep a hiccup that the narrowing leadership and speculative bubbles might foreshadow.

This is one weird tape.

Who should replace Stan O’Neal
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The content contained represent the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No positions in stocks mentioned.

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