From my bloomberg today..... I like your call here but I have to say that is if I was a long term shareholder I would be furious beyond words.

Win Smith, Former Merrill Executive, Is Buying Shares Again

By Zachary R. Mider

July 29 (Bloomberg) -- Winthrop Smith Jr., the former head of Merrill Lynch & Co.'s international brokerage unit, said he's buying the firm's shares again after Chief Executive Officer John Thain announced plans to shed risky assets and raise capital.

Smith, who left the firm in 2001, sold all his shares before Thain took charge of the third-biggest U.S. securities firm last year, he said in a Bloomberg Television interview today. Thain raised $8.55 billion of equity today and sold $30.6 billion of bonds at a fifth of their face value to preserve credit ratings threatened by mortgage losses.

``John Thain inherited a sick patient,'' said Smith, 58. ``I think this is medicine which is a little bit bitter, but I think it's a good move, and I think it does remove a lot of risk, if not most of the risk from the balance sheet.''

Smith worked at Merrill for almost three decades before exiting when he lost out to Stanley O'Neal in the race to become Merrill's president. Under O'Neal, Merrill became the leading underwriter of collateralized debt obligations, bonds created by packaging other debt securities. O'Neal was ousted last year after a decline in the U.S. housing industry caused a collapse in the market for CDOs and mortgage-backed securities.

Smith's father, who bore the same name, was CEO of Merrill from 1959, when Merrill converted into a public corporation from a partnership, until his death in 1961.



Merrill rose 36 cents, or 1.5 percent, to $24.69 at 1:18 p.m. in New York Stock Exchange composite trading. Before today, the stock fell 56 percent this year.

`Good Value'

``I've started to buy a little bit here, and I think this is good value going forward,'' Smith said.

Banks and securities firms have raised more than $350 billion after the global credit contraction led to credit losses and writedowns of more than $470 billion. The crisis cost Bear Stearns Cos., the fifth-biggest U.S. securities firm, its independence when it was forced to sell itself to JPMorgan Chase & Co. to avert bankruptcy.

``Usually there's an event both at the top of the market and the bottom of the market that's climactic,'' Smith said. Merrill's asset sales and capital-raising ``appears to be one sign that maybe the market is beginning to bottom out and maybe the worst of the troubles are over,'' Smith said.