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http://online.wsj.com/article/SB122142278543033525.html?mod=mktw Bank of America Reaches Deal for Merrill By MATTHEW KARNITSCHNIG, CARRICK MOLLENKAMP and DAN FITZPATRICK September 15, 2008 In a rushed bid to ride out the storm sweeping American finance, 94-year-old Merrill Lynch & Co. agreed late Sunday to sell itself to Bank of America Corp. for roughly $44 billion. The deal, which was being worked out in 48 hours of frenetic negotiating, could instantly reshape the U.S. banking landscape, making the nation's prime behemoth even bigger. The boards of the two companies approved the deal Sunday evening, according to people familiar with the matter. Driven by Chief Executive Kenneth Lewis, Bank of America has already made dozens of acquisitions large and small, including the purchase of ailing mortgage lender Countrywide Financial Corp. earlier this year. In adding Merrill Lynch, it would control the nation's largest force of stock brokers as well as a well-regarded investment bank. A combination would create a bank of vast reach, involved in nearly every nook and cranny of the financial system, from credit cards and auto loans to bond and stock underwriting, merger advice and wealth management. It would also show how the credit crisis has created opportunities for financially sound buyers. At $44 billion, or roughly $29 a share, Merrill would be sold at about two-thirds of its value of one year ago, and half its all-time peak value of early 2007. Merrill shares changed hands at $17.05 each on Friday, after falling sharply in the wake of Lehman's looming demise. "Why would Bank of America do this?" said analyst Nancy Bush at NAB Research LLC in Annandale, N.J. "Ken Lewis always likes to buy the biggest thing he can. So why not this? You are master of the universe, basically." Bank of America and Merrill Lynch wouldn't comment on any discussions. Merrill would give Bank of America strength around the world, including emerging markets such as India. And Merrill is also strong in underwriting, an area Bank of America identified last week at an investors' conference where it would like to be more aggressive. Dramatic Deal A deal would be all the more dramatic because Merrill, upon the arrival of Chief Executive John Thain, did more than many U.S. financial giants to insulate itself from the financial crisis that began last year. It raised large amounts of capital, purged itself of toxic assets and sold big equity stakes, such as its holding in financial-information giant Bloomberg. That Merrill has opted to sell itself thus underscores the severity of crisis. The integration of Merrill, known for its proud, and sometimes testy, brokerage force, could turn out to be the biggest test of Mr. Lewis's career. Typically, the bank has made one big deal and then taken time to carefully merge the two institutions. But in recent years, acquisitions have come at a furious pace. In 2004, the bank bought FleetBoston Financial Corp. A year later, the bank agreed to buy MBNA Corp., the credit-card firm. In 2007, Bank of America bought Chicago's LaSalle Bank as part of the break-up of Dutch bank ABN-Amro Holding NV. Then came this year's purchase of Countrywide. As of Sunday evening, a deal had not yet been signed, said people briefed on the discussions. And other last-second bidders could emerge from the woodwork. Yet with news of the Bank of America talks breaking Sunday, it became all the more difficult for Merrill and Mr. Thain to rebuff a deal. Should the talks collapse, most on the Street were expecting Merrill's shares to fall even further amid widespread worries about independent broker-dealers. Inside the Fed meetings in Lower Manhattan this weekend, there was a general worry that Merrill could be the next to fall after Lehman. Through the weekend, federal officials including Federal Reserve Bank of New York head Timothy Geithner made it clear that they strongly encouraged a deal to sell Merrill, said people familiar with the matter said. If struck, a deal would come together at breakneck speed. On Friday, Bank of America's top executives were pushing for a deal with Lehman Brothers, scrambling to perform due diligence on Lehman's books. Just 48 hours later, they were locked in discussion with Merrill and its top executives. During the flurry of historic dealmaking this weekend, Merrill approached Morgan Stanley about a possible deal, which would have united two of Wall Street's oldest brands, according to a person familiar with the talks. But the talks didn't go anywhere because there wasn't enough time for Morgan Stanley to review the idea and Merrill wanted to do the deal quickly, this person said. Merrill was also stepping up talks with commercial banks both in Europe and the U.S. While Mr. Thain had once orchestrated a trans-Atlantic deal for his old firm, NYSE Euronext, in this race, a U.S. deal proved the quickest, best option for Merrill. 'The Ultimate Realist' "I think John Thain at Merrill is the ultimate realist," Ms. Bush said, the analyst, who expected federal regulators to bless the deal by relaxing deposit limits for bank-holding companies. "He knows if Lehman goes under he is not far behind. He wants to cut the best deal he can." In the past 15 months, Merrill and Lehman have both had tens of billions of dollars worth of risky, illiquid assets carried on balance sheets that were leveraged at a debt-to-equity ratio of more than 20 to one. When the credit crunch hit in mid-2007, the assets kept deteriorating in value and couldn't easily be sold, eating into both firms' capital cushion. Recently, Lehman's balance sheet topped $600 billion and Merrill's $900 billion. Merrill's one-time chief Stan O'Neal was ousted in October 2007, and his successor, Mr. Thain, tried to repair the firm's balance sheet by arranging an infusion of more than $6 billion in capital starting last December by investors led by Temasek Holdings, a Singapore government investment fund. But as the losses kept coming this year, Mr. Thain was forced in July to sell a huge slug of more than $30 billion in collateralized debt obligations at a price of just 22 cents on the dollar. That step required the firm to raise still more capital, under painful terms that re-priced some of the December stock sales at about half the original price. One top Merrill executive lamented the pending sale of the venerable company, saying "it's sad but inevitable." This executive said that he was pleased it was Merrill, rather than rival broker Morgan Stanley, that was hatching a deal with Bank of America. The fate of both Morgan Stanley and Goldman Sachs will be front and center Monday morning, as the Street wakes up to a world where the independent broker-dealer are increasingly thin in number. This tumultuous year has made it clear that investment banks like Lehman and Bear Stearns face vulnerabilities that commercial banks such as J.P. Morgan and Bank of America are less prone to. The investment banks must constantly depend on short- and medium-term money markets to fund their operations. Commercial banks, meanwhile, can count on more stable consumer deposit bases. In a highly volatile market, some advantages accrue to banks that can rely on those more stable deposit bases. At Merrill, "we became convinced that for investment banking to be possible, we need to be part of a much bigger capitalized commercial bank," the Merrill executive said. Merrill acted to avoid the same fate as Bear Stearns and Lehman, some analysts said. "Bear didn't think it could happen to them and Lehman didn't think it could happen to them either," said analyst David Trone of Fox-Pitt, Kelton. "I think management looked at Bear and Lehman and said we're not going to go down that slope, we're going to try and get our shareholders something before we end up in the same camp."

Most brokers, at least in futures, will do this for you - tell them when to 'shut off' your trading if a certain loss level is reached after your positions are liquidated.

Just wanted to say thanks to the support so far from the TL members! We have plenty of time remaining to collect donations, so please do consider a donation. The holidays are not that far off, so think about donating now before the gifts are cramping your spending! Thanks everyone!

This is it - make or break this year on this one game. We win and we can cruise into the title game; lose and it's all but over.

Wow... This is really good stuff Suri and I hope we see more from you!!!! Welcome to the forum!

Not sure how, but I got on some holy grail trading email list. In a recent email they offered a countdown clock and I downloaded it. It's actually really nice and pretty much what I was looking for, but I have to look at their advertisement for this... So I attached it to this post and was wondering if any of our programmers can tear it apart and peel out the ad stuff. I have no idea how I even got this email from this vendor, so don't take this as any endorsement of their products. Countdownsetup.zip

Just wondering if anyone else has noticed that TL sometimes runs slow or takes awhile to load on FireFox v3. It could easily just be my computer, but wanted to see if anyone else noticed this on their end.

Is there some new people in the Candlestick Corner today? Wow. And here I thought only a few select people could even see this part of the forum existed.

Janus - that could work. Will test it out this week. Thanks!

I do that but not b/c of wanting to restrict my losses - I do it b/c I don't want money sitting there earning 0% interest. Same idea, but different reasons why.

Thanks for the suggestions everyone. The ideal program has a function that I can tell to go off every X minutes vs. having to type in an alarm at every new interval myself. Example - if I want an alarm to go off every 5 minutes, I'd like to just tell the program - go off every 5 minutes; whereas some of the programs listed here do not handle that function. To do that in some programs, I would have to manually create an alarm at 8:00am, 8:05am, 8:10am, etc. etc. Time consuming to say the least. And a real pain to change later as well.

That was probably one of the best things I did for my trading - trade less, make more, be happy.

Easy way to find out - look at past charts.

http://www.traderslaboratory.com/forums/f46/ try there.

Bummer. Maybe they will open it up more as it progresses. Or maybe the plan is to keep the main hours AWAY from the CME... lol

James - if reading that right from the press release, sounds like it will be closed from 3pm - 2am Chicago team? If that's true, then the hours you mentioned will not be available.

That would be interesting to have a contract available here in the evening that has liquidity. Should be fun to see where this goes.

Interesting gap up there we have on the ES currently: Granted this was news driven, but the TA on this is there as discussed previously. We got a nice push down and a retest of a level on Fri via the hammer. An aggressive buy would have been to either have a buy stop sitting out there or being ready to go on Sun at the open. You just gotta wonder how many knew what was coming over the weekend and were gobbling up long contracts on Fri...

James - what time(s) is this contract the most active? If possible, convert to EST so my lazy butt doesn't have to.

Interesting press release. Should be fun to see how this flows over into the CME. Looking forward to at least being able to watch it.

I personally just observe volume, but it does not impact any of my decision making. Friday's intraday action was bullish not necessarily b/c it finished up (and created the top of our hammer) but b/c the bulls rejected any bearish attempts twice. That's all I need to know.

Andy - read the forum and learn WHERE to post your requests. This is NOT the thread to be asking for indicator help...

On quote.com it looks like it was around 845am EST, but that could be off. I don't have my OEC trader up right now to see exactly.

Good question MC. I didn't even look at volume to be honest in my analysis there. Through quote.com it appears the volume on Fri was pretty substantial, so not sure if we are on the same page here: Quote.com has been known to be wrong before as well. ========== Now if you are referring to the previous area that was used as a S/R level, I pay no attention to volume when finding S/R. Why? I'm looking for areas where price was QUICKLY rejected, which means more often than not, the volume will be lower at this level. In other words, while the entire daily candle might show good/decent volume, the area that I am really interested in more often than not has lower volume. And that makes sense - I want to see where buyers/sellers stepped in to stop price in it's tracks and that's usually a volume burst but not necessarily a substantial volume push. Volume on the daily is a good guide, but it can be misleading in terms of how much volume traded at what level.

Today was an interesting day: We have a hammer, which is a bullish individual candlestick but more important we saw an attempt to go lower that was rejected rather easily today. The intraday chart (15 min) looked like: What we saw were TWO attempts by the bears to penetrate even further and both attempts were unsuccessful. And if we add the 1233 area on the intraday 15 min chart (nearest s/r on my dailies) we see: The two attempts to bring the market down both occurred at a previous level. This resistance then turned into intraday support as evidenced by the up arrow to possibly get long. So just doing a quick look at the 15 min chart and using a previous support area, we can see 3 possible shorts and 1 possible long. And a 5 min chart: As we can see above, the first two possible areas to short were pretty clear and fairly easy. Note that both of these occurred in pre-market hours. Today was a non-farm payroll day, so pre-market gyrations were expected. And then right into lunch we get the lunchtime congestion, which also coincidentally was at the previous support area. Price hung around there for close to 2 hours before the bears gave up and the bulls took control; therefore giving us that daily hammer. IMO we have a pretty defined trading range, box or area (whatever you want to call it).