The Undead (Financial edition)

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Like the unstoppable killer in a horror movie, an unfeeling entity who once menaced OC and was believed to be long gone, is now poised to return. Just in time for Halloween, no less. If nothing else, you have to admire the timing.

A county finance committee voted yesterday to add Merrill Lynch to the list of approved underwriters with which the county may do business. The reason Merrill Lynch hasn't been on the list, despite the fact that it is one of the county's leading brokerage houses, is, of course, because Merrill Lynch played a leading role in driving the county into bankruptcy back in 1994.

The vote was unanimous, and done very quietly, since, perhaps, some members of the public might still be a little cool to a brokerage house whose actions helped land the county $1.6 billion in the hole. But to paraphrase Stalin's famous line about killing: The bankruptcy of one is a tragedy, the bankruptcy of a community of millions is a statistic. The county's actually being doing limited business with Merrill Lynch for the past three years. And seeing how the county's bankruptcy debt is down to a svelte $600 million, it's felt that it's time to let bygones be bygones, and put the outfit that did so much to dig the hole back on the list of the trustworthy with no conditions attached. (Personally, I would have waited until the bankruptcy debt dropped beneath the half-a-billion dollar mark, but maybe I'm overly sensitive.)

So, what guarantee is there that Merrill Lynch will be either more competent or more honest or both this time? According to committee chairman Thomas Hammond (a mortgage banker by day), no one needs to worry because a company like Merrill Lynch is inherently unstable. Hammond explained to the Los Angeles Times that "investment bankers never stay at the same place. They move on after five years." See, instability and the ability of investment bankers to avoid responsibility for the consequences of their actions by moving on before all but the shortest term results are known are the cornerstones of financial reliability.

The final decision is up to the Board of Supervisors, who will take up the matter at its November 14 meeting. Presumably, the board will go along with the committee and welcome Merrill Lynch back into the fold. And then the committee and the board can take the next step in restoring the old status quo: putting psychics back on the list of approved county financial advisors.


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