Macquarie Group shares crashed by as much as 21% in morning trade as the global credit crisis and targeting of investment banks reached fever pitch.

By midday the shares were down $5.18 to $28.75 as the Millionaires Factory stridently defended its financial strength and ASIC launched a probe into false rumours.

The corporate plod released this statement after the market closed yesterday promising to get tough on people spreading false rumours. Macquarie Group was specific identified as a potential victim of false rumours and at 3pm yesterday ASIC interviewed Wilson HTM banking analyst Brett Le Mesurier.

Macquarie lashed out at The Australian yesterday morning for what still looks like a reckless story by Adele Ferguson claiming it must refinance $45 billion in debt by March next year.

Its reputation, moreover, is for being prickly, even hostile, when criticised. When BRW was preparing a cover story on Macquarie three years ago, the bank started issuing complaints to the magazine’s proprietor, John Fairfax Group, even before publication. Two years ago, transport academic Dr John Goldberg published a paper casting doubt on the viability of the M2 Motorway and the Lane Cove and Cross City tunnels; the bank not only complained to the University of Sydney, where he was an honorary associate, but demanded the university disassociate itself from his comments. Whatever the rights and wrongs of Goldberg’s critique, it seemed needlessly heavy-handed. Likewise the response to the Wilson HTM analyst Brett Le Mesurier, who was told recently that he was being denied access to management because he had had the temerity to write a note to clients comparing Macquarie to its smaller rival Babcock & Brown. “Of course,” says the puckish Le Mesurier, “that just encourages me.”

Ferguson and Le Mesurier might like stirring Macquarie, but in the current environment you just can’t say a bank has $45 billion repayable in 9 months if it is not true – especially when Macquarie is already suing The Australian for defamation over the Walkley Award winning Beaconsfield gold mine coverage by Michael West.

The Australian certainly didn’t take a backward step this morning as Adele Ferguson had another go in a comment piece, John Durie criticised Macquarie’s slow disclosure of modest exposures to Lehman and AIG and Tim Boreham changed his recommendation to “avoid”.

The AFR quoted Macquarie finance director Greg Ward saying the figure was “at most” $25 billion and then declared: “Even if you take the whole $25 billion, we’ve got the cash of $20 billion, plus the undrawn facilities.”

Business Spectator’s Tony Boyd has provided some calm perspective on the situation (see today’s Crikey business section), suggesting the bank improve its delphic market disclosure practices.

Macquarie can be a real bully at times, but at times likes this it should not be compared with Babcock & Brown, which is literally at the mercy of its bankers. Babcock shares plunged another 17c to 75c in morning trade, whilst Macquarie remains 500% up on its 1996 float price.

However, if Macquarie really is enormously strong at this time, it should promptly announce a share buyback to prove the point.

Peter Fray

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