BAC To Buy MER Rumor

And to top it all off, the Public relations bandwagon is feeding pep pills to their little robots telling them that Merrill is an asset and not a liability.  Let me say right here and now, I have no idea whether MER is an asset or a liability.  However, the propensity and persistence of their downward price action tells me that they are far from being an asset at all.

We will only know in hindsight whether (MER) is an asset or a liability.  Therefore, since it is unknown what the paper represents, why would you try to trade it?  Imagine buying something from someone for a fixed dollar amount.  Now imagine that thing you bought has a special characteristic.  It has unlimited risk.  Undefined.  It can go to negative trillions.  How much would you pay for that?  Exactly.  Bad trade if you are involved.  I highly doubt that a (BAC) (MER) merger will go through.  Whatever happens will happen, but let the drama play out elsewhere.  Why would you ever want to even be involved in these? If it does happen to go through, short the combined entity into the ground.  They just bought an asset that may not be an asset at all.

When you buy an asset that is actually a liability you become a dreamer.  Not the good kind.  The kind like the character you heard about in the famous play by Supertramp.  And just like Supertramp says: Dreamer, you stupid little dreamer.  So now you put your head in your hands, oh no!

Bad risk reward.

Risk small to make big.  Not the reverse.  When you try it in reverse the correlations may not correlate any more at all.  In fact, they might deviate.  And that ain’t great.

Peace.