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Author: cdecar One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1717  
Subject: Are analysts telling the truth on downgrades? Date: 1/5/2001 11:17 AM
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Since I have been following the markets I have notice a very scary situation with financial institutions. The distruction of our markets in the last six months do not fall solely on the economic down sizing, but fall on the financial brokerage houses and their analysts. The JP Morgans, Merrills, and Lehmans are the ones to blame for market conditions, these institutions have torn the inner fiber of or market system with unethical downgrades of complete sectors without any foundational proof what so ever. Here are some of the reasons why they have acted in this fashion for the last six months.
The biggest profits in history for these institutions came in the last two quarters, why you ask? Simple the analysts in these institutions created such a panic within the investment community that investors ran for cover Bringing billions of dollars into the top 10 financial institutions in the country for security. Now with all these funds neatly tied up under their wing, they do not want to start upgrading stocks in the fear that investors will begin to move this pot of gold out of their coffers and back into the market. So instead of fairly praising the successful stocks they initiate neutral coverage on almost every stock and only upgrading slightly a few stocks carried by their brokerage firms.
The blame for the financial disaster of 2000 does not fall mainly on economic issues but analysts and their brokerage house's ethical behavior, the SEC should seriously look deep into the reasoning behind this madness.
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