I think that their departure has been on the cards for some time, certainly no later than the “leaking” of the “internal” Lewis memo on Feb 24. After that, it has been official company policy to have great faith in the solvency of the financial system, and that of BofA, in particular. Clearly, that faith is not shared by Bernstein and Rosenberg – and they have not been to shy to express their unorthodoxy in public: Rosenberg more indirectly by predicting (March 9) S&P 500 hitting 600 in October, and Bernstein as openly as possible. Did they anticipate their departure? After the “leaked” memo, they sure did know what lay ahead.

“You for some totally bizarre reason which I’m unable to understand seem to think a complete collapse of the US financial financial system would be an improving experience (I think you thought the same about the siege of Berlin the other day) with no impact on the lives of most of it’s ordinary citizens”

dude- you make me laugh. Let me enlighten you as to what we discussed the other day. My comparison was that the collapse of the financial system was not Armageddon and that Soviet tanks destroying the city of Berlin was. One involves death and physical destruction the other possible financial hardship and tough economic times. Using my incredible IQ and survival instinct- I’ll take the latter.

I’m sure I’m missing some but that’s the head of brokerage plus those two guys leaving, I wonder if Mr. Lewis still thinks Mother Merrill is the crown jewel he thought it was when he bought it, ….at a premium.

March 24th, 2009 at 10:16 am
otto- you jump to the conclusion that if the government didn’t take your preferred course of action then there would be a depression- this is simply conjecture and unknowable. Please don’t imply from my three word comment above that I then must believe that the financial system was not in any form of danger.

……..Of course it’s unknowable but since governments from China to the USA have intervened in markets and financial systems to an extent that I have never seen in my lifetime to avert a financial meltdown with the avowed purpose of heading off a huge recession/depression which even with this intervention looks set the most serious since the war it’s surely reasonable to assume there was a fair likelihood of it happening…….You for some totally bizarre reason which I’m unable to understand seem to think a complete collapse of the US financial financial system would be an improving experience (I think you thought the same about the siege of Berlin the other day) with no impact on the lives of most of it’s ordinary citizens….. You couldn’t be more wrong….I just don’t subscribe to this reckless philosophy and neither does anyone else charged with real responsibility for future of the country……

One other thing… Biderman from TrimTabs, usualy an upbeat type, said on CNBC that corporate insider buying has plummetted.

Steve, I’m getting nervous that I keep going after what you say (see my constant put/call ratio questions) but what does this really tell you at all? I mean, these were the same insiders that were buying back in late 2007 right? That’s like saying it’s bearish because there are no stock buybacks at CAT but it was somehow bullish when CAT was buying stock back at $80/share.

“Sure the financial system was in no danger whatever”

otto- you jump to the conclusion that if the government didn’t take your preferred course of action then there would be a depression- this is simply conjecture and unknowable. Please don’t imply from my three word comment above that I then must believe that the financial system was not in any form of danger.

secondly- I read your linked article. I am unimpressed. The “protected class” such as bondholders should be bearing the brunt of any damages. You have to take the good with the bad. Remember- without the USG intervention many of these banks would be bust, stockholders and bondholders wiped out. That is the way it supposed to work. The bondholders take the losses not the taxpayers. Bankruptcy, then the USG can buy the distressed assets for pennies. I honestly believe that the USG is doing what it can to maintain “what was”. That’s not forward thinking obviously. The US has a great chance to become a broken hollowed out shell of its former self instead of re-inventing itself to something better.

“Bernstein, Rosenberg to Leave Bank of America, Spokeswoman Says”  (By Bob Ivry and David Mildenberg March 24, Bloomberg)

‘Richard Bernstein, chief U.S. quantative strategist, and David Rosenberg, the chief North American economist, are leaving Bank of America Corp., a company spokeswoman said.
Bernstein, 50, will start his own money management company after leaving in mid-April, and Rosenberg, a native of Canada who plans to leave in mid-May, will join Gluskin Sheff & Associates in Toronto, said a person familiar with the decisions. Bank of America spokeswoman Susan McCabe confirmed the departures.
“The wisdom and counsel that David and Rich provided clients, analysts and our businesses have enriched our franchise,” McCabe said today.
Both men are based in New York and were employees at Merrill Lynch & Co. before Charlotte, North Carolina-based Bank of America bought the Wall Street brokerage firm in January.
In a note to investors March 23, Bernstein advised selling bank shares. Removing distressed assets from banks’ balance sheets is a short-term solution that will prolong a resolution of the credit crisis, he said.
Rosenberg said March 9 that the Standard & Poor’s 500 Index may reach a low of 600 in October.’

It does not matter much whether they left BofA voluntarily or whether they were pushed (highly likely): there is no way you can serve simultaneously and for a longer period two incompatible credos, i.e. the resurrection faith of BofA and etc. and the fundamentalism of bond traders.

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/23/AR2009032302800.html?hpid=topnews

I look at

1. Investment grade corporates–BARELY budged on 7% market rally. Something smells in Denmark. Debt should always recover first [and is smarter than equities]

2. the VIX remains above 40. That’s the level is has to crack meaningfully on down side side to be a lasting rally

3. not sure if BR deleted my comparison of 1929-30 with annotation from Galbraith’s “The Crash” [not planning on stealing my stuff for your book now Barry are u??] 1930 had a HUGE spring rally [actually 100%--I'm expected about 30% here], so the “rhyming continues”;

4. As also pointed out in the book and my analysis, trade wars and protectionism began to rise. See http://www.nytimes.com/2009/03/23/world/23trade.html “Trade Barriers Rise as Slump Tightens Grip”

5. The oscillators i look at are all at screaming heights– they have been amazingly accurate for uptrends/downtrends when at extremes

6. CNBC just trotted out ABBY JC!! “the buying opportunity of a lifetime]”–And i though she was put out to pasture… Fortunately they had Jack Bogle on saying he can’t the economy recovering for a year or year and a half minimum.