Analysts Knew They Were Hyping Junk Stocks

from the no-big-surprise-there dept

While I'm sure it comes as no surprise to most people that Henry "Hype 'Em Up" Blodget was hyping up stocks that were worthless, it is surprising that he and his fellow analysts at Merrill Lynch were stupid enough to admit that in emails to each other. The emails have come out thanks to an investigation concerning exactly what these analysts were doing. They show that analysts referred to certain stocks as "a piece of junk" or "a piece of crap" while the firm was still promoting them as "strong buys" and making lots of money off of related trading. They even have an email where an analyst admits that many retail investors are probably "losing their retirement" thanks to their advice. Merrill Lynch's response is that these phrases were "taken out of context". Indeed. I think the necessary "context" is that they were raking in crazy amounts of cash.