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[Ulisses Pereira]

"Bears Are Having Their Way With Merrill"

By Jim Cramer
RealMoney.com Columnist
3/19/2008 3:14 PM EDT

"Can you believe this Merrill Lynch (MER - commentary - Cramer's Take) raid? Shorts are knocking this one over with a feather. They are crushing it, using several time-honored rumors, including massive writedowns coming and a massive dilution coming.




Me? I don't know. Is Merrill the next Bear (BSC - commentary - Cramer's Take)? I thought Lehman (LEH - commentary - Cramer's Take) was supposed to be the next Bear. Then I heard it was Bank of America (BAC - commentary - Cramer's Take).

Here's my take on Merrill Lynch. I spoke this morning at a terrific class at Columbia as part of the Silfin Leadership Series, named after David Silfin, one of the absolute best execs I have ever seen when he ran the arb desk at Goldman (GS - commentary - Cramer's Take). Someone asked me about Merrill, and I said it was my least favorite brokerage stock.

I think there are four potential horsemen of the financial apocalypse: Merrill, Citigroup (C - commentary - Cramer's Take), UBS (UBS - commentary - Cramer's Take) and Washington Mutual (WM - commentary - Cramer's Take). I suspect that WM will get a takeunder one day from Wells Fargo (WFC - commentary - Cramer's Take) in a well-orchestrated merger along the Bear lines. Merrill? Goldman would be the natural buyer. I don't expect it or want it to come to this. But the book's probably vastly overstated here.

UBS? Suisse (CS - commentary - Cramer's Take). I know its asset management is the envy of all brokers. Slam down their mortgage business and pick up the asset business, and you have a great trade. The UBS raid is like the Merrill raid, but I don't have the call there and I don't know the problems, other than -- once again -- CDOs.

Citi? I have no idea. That's the biggest worry I have and the company that keeps me up at night. Vikram Pandit hasn't done a thing yet. That company needs to be dumping assets -- including the ones just added -- and raising money. That company's in real trouble.

Fortunately, in Merrill's case there are assets that can be sold pretty easily - BlackRock (BLK - commentary - Cramer's Take) and Bloomberg. But I don't know if I want to bank with John Thain; he failed to deliver at NYSE Euronext (NYX - commentary - Cramer's Take), hence that horrid stock, and he might go to Treasury in a McCain presidency.

In short -- I don't like the stock, rumor or not.

At the time of publication, Cramer was long Goldman Sachs and NYSE Euronext. "

(in www.realmoney.com)