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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35363  
Subject: Re: Merrill Lynch and Black Rock Date: 2/13/2006 10:37 AM
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Note that Salomon Smith Barney (owner Citibank?), just sold its mutual funds to LeggMason. Actually they did a swap. Mutual fund management went to LeggMason and retail brokerage went to Citibank.

It looks as if major brokerage houses are unloading their mutual fund operations in return for whatever assets they can get. I wonder why. Most are perennial underachievers, with great sounding goals, and high fees. They are infact in house copies of popular high fliers that get pushed by brokers on their clients for extra profits.

So this looks like unbundling--possibly in an effort for brokerage houses to clean up their images. I would be surprised to see ML acquire Black Rock under the circumstances, but look for Black Rock to buy out ML's interest gradually from down stream profits assuming the acquisition does well.

And by the way, brokerage stocks are doing very well these days. Take a look at ET, LEH, LM. All have steep up trends on the charts. Ditto insurance companies. Its a great time to be in finance. Business is good. Interest rates may be rising, but they are not high.
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