NEW YORK, Sept. 16 /PRNewswire/ -- "The Fed did the right thing to not
get involved, to remove the moral hazard of institutions ignoring the risk
of their counterparties going bankrupt," says Manny Weintraub, former
Managing Director of Neuberger Berman and Founder of money management firm
Integre Advisors.

    "I do think it means that Goldman Sachs and Morgan Stanley will try and
find partners sooner than later. Today, as a counterparty, they have to
charge less than firms with less leverage like JP Morgan or Bank of
America. It used to be if you were going to do a transaction, you would go
with whoever could get it done more cheaply for you. Now, there's a sense
of why take the risk to enter into a counterparty transaction with a highly
levered institution?

    "So if you compare how Merrill Lynch worked out to how Lehman Brothers
or Bear Stearns worked out, under CEO John Thain, Merrill Lynch has always
been more aggressive about raising more capital sooner and was more
aggressive about selling out sooner. So I think that's the lesson for
Goldman Sachs and Morgan Stanley: You've got to get out while the going is
good.

    "Because I think the whole business model of a brokerage firm is
broken. The business model where the employees take 50 percent of the
revenue, and no risk if the transaction doesn't work out, is shot. Even if
they're not thieves, the employees' financial self-interest is to focus on
current year's earnings, this year's bonus. That's what the culture of the
company was telling them to do. 'If you generate a lot of earnings this
year, we will pay you for it.'

    "But these things come home to roost and possibly the people who
created the transactions are no longer around, or if they are around, they
already got paid for previous transactions. Meanwhile the leverage is just
incredible compared to even a bank -- which is a highly levered institution
too. I think Goldman Sachs and Morgan Stanley will ultimately recognize
that and are in a relatively good position to get the maximum possible
price.

    "Fortunately for our customers, our concerns about leverage and our
experience in declining real-estate markets kept us away from financials
even though many pundits were telling us that avoiding financials was 'last
year's trade.'

    "I still believe that in the end we're going to end up in a world where
housing is more affordable -- where one doesn't have to be rich to afford a
middle-class house. But we are not in that world yet. In the South and the
Midwest, things have been adjusted in terms of pricing; we're still waiting
on the Northeast and West.

    "I think we'll also get to a point where the American worker will be
able to make a living working as opposed to flipping houses, which is what
they were told to do by the government and culture in a way.

    "The destination should be good, but the journey getting there is
scary, with a lot of financial uncertainty along the way."

    Integre Advisors is a $325.8-million asset management firm that invests
in companies it believes are attractively valued but temporarily out of
favor.



    If you would like to speak with Manny Weintraub about Integre, the
market, or the stocks in his portfolio, please contact Davia Temin or Trang
Mar of Temin and Company at 212.588.8788 or news@teminandco.com.



    Disclaimer

    The content contained in this statement represents the opinions of
Manny Weintraub, principal of Integre Advisors, LLC, a federally registered
investment adviser (the "Firm"). Mr. Weintraub acts as an investment
adviser, and clients advised by Mr. Weintraub, the Firm and Mr. Weintraub
himself and his family may or may not hold positions in securities
discussed herein. The views expressed represent Mr. Weintraub's opinions
only and are not a guarantee of future performance. Past performance is no
guarantee of future results.



    You may obtain additional information on Integre Advisors and its
Diversified or Concentrated Portfolios by contacting Integre Advisors
(info@integreadvisors.com). Views and perspectives provided in this release
are an opinion of Mr. Weintraub and the companies mentioned may not be
current or future holdings of Integre Advisors. Any company mentioned
should not be considered a recommendation of Integre Advisors.

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