The latest Merrill Lynch Research Investment Committee Report (published on 12 August 2008), or "RIC", by Chief Investment Strategist Richard Bernstein, emphasizes that the global financial sector is under stress, and that the issues confronting the financial sector are not simply related to the "US subprime problem." and "patience will be well rewarded". Insights from the RIC report:

• The credit crisis is clearly a global event.
• Outlook for global financials is still not a particularly attractive one.
• Housing and credit market is in classic "Catch-22" situation. Housing can't stabilize until credit conditions do, but credit can't stabilize until housing does.
• The over-capacity in the global banking system is widespread, and consolidation seems certain to lie ahead as lending capacity is rationalized and reduced.
• Expect the formation of a government entity, similar to 1989/90's Resolution Trust Corporation that is designed to facilitate the sector's consolidation.
• Global debt continues to outperform global equity this year, which suggests that investors are being compensated for their time on the sidelines. Patience will be well-rewarded.

To read Merrill Lynch RIC transcript, click here.

The latest Merrill Lynch Investment Strategy Update (published on 12 August 2008) by Richard Bernstein, Chief Investment Strategist and Dan Suzuki, CFA, Investment Strategist has a view that credit market appears to be tightening; and credit crisis is bigger than current consensus. Insights from the Investment Strategy Update report:

• Credit Availability Indicator shows further credit tightening.
• The rising cost of capital within the global economy as a result of the credit crisis is likely to slow global growth perhaps more than investors currently expect.
• The credit crisis is larger than current consensus.

To read Merrill Lynch Investment Strategy Update transcript, click here.

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