Thursday January 29, 07:27 PM
STOCKS NEWS US-Merrill Lynch skeptical on 'bad bank' rallies
Stocks on the move Real (Frankfurt: BJU1.F - news) -time Equity news
U.S. stock market report
1405 ET 29Jan2009-Merrill Lynch (NYSE: MER - news) skeptical on 'bad bank' rallies
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Merrill Lynch on Thursday expressed skepticism about market rallies related
to the idea that the government may form a 'bad bank' to help stabilize the
banking sector, noting that similar relief rallies occurred after the TARP
program was announced, after which 'recession realities and their implications
for corporate profits sank back in.'
When TARP was first unveiled, the firm wrote, the S&P 500 was at
1,255, dropping to 1,114 by the time it was signed and delivered to Congress.
'Today, we sit at 874 and most folks we talk to have the same euphoric look
in their eye with the latest 'aggregator bank' idea, as if this is now going to
be the savior for the credit cycle,' it wrote.
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