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Merrill Lynch losing two top strategists

March 24, 2009 | 12:06 pm

Two of Merrill Lynch & Co.'s best-known strategists -- and best-known pessimists -- are leaving the firm, the latest to depart since Bank of America Corp.'s takeover of the brokerage on Jan. 1.

Richard Bernstein, Merrill's chief investment strategist, will depart April 15, Bloomberg News reported. David Rosenberg, the company’s chief North American economist, will leave May 11 to become chief economist and strategist at Toronto-based wealth manager Gluskin Sheff + Associates.

Bernstein has been notoriously cautious on stocks for much of this decade -- although even he wasn’t bearish enough in the last year. To his credit, he was particularly grim about the financial sector last summer, warning in mid-August that most investors were "significantly underestimating" the credit crisis.

Just Monday, he advised selling bank stocks after their recent rally, saying the government’s latest plan to get rotting assets off banks’ balance sheets would just delay an inevitable further industry consolidation.

Merrrillbull As for Rosenberg, well before the economy crumbled last fall he had been warning for years that the U.S. faced a day of reckoning from heavy borrowing to sustain spending.

In August, I wrote a column about his view that Americans were headed for a new age of frugality. Even Rosenberg didn’t imagine the scope of the financial and economic meltdowns that would hit in September, but he was closer to the truth than many of his peer economists on Wall Street.

There will be inevitable speculation that Bernstein and Rosenberg were too downbeat for their new corporate parent’s tastes, but BofA was gracious in confirming their departures.

From Bloomberg News:

"The wisdom and counsel that David and Rich provided clients, analysts and our businesses have enriched our franchise," BofA spokeswoman Susan McCabe said today.

Rosenberg decided to leave for personal reasons, while Bernstein sought new challenges after more than 20 years as an analyst, Candace Browning, president of Bank of America Merrill Lynch Global Research, said in a memo to employees. McCabe confirmed the memo’s authenticity.

The two executives join an exodus of senior managers since Bank of America bought the Wall Street brokerage in January, including CEO John Thain, investment banking chief Greg Fleming and Robert McCann, head of wealth management. Bank of America is cutting 35,000 jobs in the next three years to generate more than $7 billion in annual cost savings.

-- Tom Petruno

Photo: The Merrill Lynch bull