In asset-backed land, the pending Chase Manhattan/J.P. Morgan merger has players wondering where the inevitable overlaps will leave the existing product groups.

"It's going to be an absolute blood bath," said one market observer. "People are literally going to be fighting for their jobs."

The source sees the CBO and credit derivatives groups as a place where there might be friction.

"J.P. has been at it a long time, they're rock solid in those areas," the source said. "They have the technology, as opposed to Chase, which has really just started to beef that up."

Last spring Chase added CDO pros Frank Ronin, from Merrill Lynch, and Eileen Murphy from Moody's Investors Service, in efforts to build that product group.

Also at issue, according to a recruiter working in the asset-backed industry, is that J.P. Morgan has changed its employee relationship philosophy over the last few years.

"Maybe going back six or seven years ago, you couldn't touch anybody at J.P. Morgan, they were really taking care of their employees," the recruiter said. "Now you can pretty much take somebody out of there for the right amount of money. They've really changed culturally as an organization. If not, I think Chase would really be in a bad way right now."

Further, Chase has demonstrated itself as an organization on the upswing in terms of structured finance - ramping its mortgage team, derivatives team, and other asset classes over the last year or so - while J.P. Morgan has been more stagnant, the source added.

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