Taxpayers should be furious at how they and their money are being treated. Bank of America did not buy Merrill Lynch for the good of the country: It bought it because Ken Lewis thought, wrongly, that he was getting a deal. Ken Lewis should be held accountable for this. Hank Paulson, meanwhile, should immediately disclose exactly what this secret deal was, when he made it, and why:

Bank of America’s Secret Backroom Bailout

Bank of America Shocker: How Much More Will Taxpayers Take?

That some BAO shareholders are calling for Lewis to be fired is not surprising, considering:

* On Dec. 5, Bank of America shareholders approved the Merrill transaction; less than two weeks later, BOA executives were meeting with government officials expressing concern about the size of Merrill-related losses. BOA’s official explanation – “beginning in the second week of December, and progressively over the remainder of the month, market conditions deteriorated substantially…” – rings hollow, at best.
* From the end of 2007 until early September 2008, Merrill had taken over $50 billion in subprime-related losses, according to Bloomberg. Did Lewis and BOA’s management think that was the end of Merrill’s losses?
* Bank of America has now received $45 billion in direct government capital – diluting common shareholders and matching the amount received by industry laggard Citigroup – as well as $118 billion in guarantees for its bad debts.
* Everyone today is focused on the Merrill Lynch deal, but Lewis also acquired Countrywide Financial, the biggest and most aggressive lender of the subprime era. Raise your hand if you think there aren’t huge losses coming from that portfolio.

Category: Bailouts, Corporate Management, M&A, Video

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

4 Responses to “Bank of America Shocker”

  1. Mike in Nola says:

    Barry, are there supposed to be two videos embedded in this page? It seems to be formatted that way, but I can only see one in either IE7 or FF.

    I agree with you that Americans should be royally pissed by our unelected officials giving away our money to these hubristic pieces of sh_t. Why is Ken Lewis still employed at BAC?

    Why is any high executive at any bankrupt financial institution still employed there after we have given them money? The Brits at least are smart enough to get rid of the executives.

  2. Steve Barry says:

    Barry,

    With all due respect, you are way, way off base on this one. Blodgett is just insane about it.

    Ken Lewis knew what he didn’t know…he knew he had no time to do full due diligence on Merrill. He did it NOT out of incompetence. He did it to get bigger. During normal times, CEO’s get bigger to assuage their massive egos. It usually is a bad strategic decision anyway, but they control a bigger empire. In the current credit deflation you get bigger or die…you get yourself “too big to fail” and thus qualify for the big taxpayer handout. And it worked. Ken Lewis is a genius.

    I lived through 2 of the biggest mergers in corporate history…this is how these guys think.

  3. Moss says:

    People are desensitized at this point. We will never know the true motives but I imagine this was a setup of some sort by the elites given the recent comments about not letting majors fail. Once the stock started to tank what did Lewis have to lose? Seems like financial blackmail at the expense of the taxpayer. Lewis will retire with some nice package built in to his employment contract. What is curious to me is that inside info was obviously leaked prior to the public announcement. The corruption continues.

  4. aka_ces says:

    Ken Lewis – Failure so Big it must be rewarded.