Fed Emails: Ken Lewis “Reckless”
The WSJ reports on Congressman Edolphus Towns unearthing of emails documents in which the Fed Chief trashes Ken Lewis’ attempt to squirm out of the Merrill acquisition.
Federal Reserve officials sharply criticized Bank of America Corp. and its Chief Executive Kenneth Lewis in emails to each other after the bank tried to pull out of its deal to buy troubled investment bank Merrill Lynch, according to documents unearthed by congressional investigators.
During the December standoff between the big bank and top government officials, Federal Reserve Chairman Ben Bernanke dismissed the threat as a “bargaining chip,” Fed attorneys called the bank’s arguments “not credible” and a top examiner said Mr. Lewis’s own position “seems somewhat suspect. . . ”
The emails confirm Mr. Bernanke was willing to threaten Mr. Lewis’s removal as CEO if he reneged on the Merrill deal and later sought assistance. They also suggest Fed officials had a dim view of bank management, with the Fed’s top lawyer noting at one point that Mr. Lewis “can be reckless.”
Reminds me a bit of what happened to Henry Blodget: He publicly had put buys on certain covered firms, but criticized his firm (Merrill!) for bringing junk public.
Too bad the Fed Chief could not have been more forthcoming about the asshats running Bank of America before we gave them $25 $45 billion plus another $250 billion in guarantees . . .
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Source:
Emails Show Fed Officials Critical of BofA, CEO Lewis
MICHAEL R. CRITTENDEN
WSJ, June 10, 2009, 4:28 P.M. ET
http://online.wsj.com/article/SB124466361157703247.html
June 10th, 2009 at 5:36 pm
How dare Bernanke think he could intervene into the operations of a private company by removing it’s CEO!? Didn’t he realize that is the path to socialism?!
/sarcasm
June 10th, 2009 at 5:37 pm
There really are emails that “B-52″ Ben authored? This really isn’t going to end well. It will be fun seeing the Fed’s dirty laundry get aired though.
June 10th, 2009 at 5:50 pm
well if they told us what they think of all of the banks management there would likely be a large run on all of them. and nobody really wants that do they?
June 10th, 2009 at 5:57 pm
willid gets the points for that one..
and, additionally, the FedRes knows that they’d be done for, too..
why do think they meet in Secret, after all?
June 10th, 2009 at 6:10 pm
Kenny tried to run out on the deal when John Thain showed me what he had stored in his commode.
June 10th, 2009 at 6:35 pm
Gentle Ben testified to Congress that he never threatened Lewis about pulling out of the ML deal, right?
June 10th, 2009 at 6:45 pm
so wait.. . . the FED threatened Lewis’ job if he did not buy BofA and Barry’s only comment is:
“Too bad the Fed Chief could not have been more forthcoming about the asshats running Bank of America ”
I’m shocked that such a rampant abuse of power is soft pedaled.
June 10th, 2009 at 6:46 pm
Reckless.. isn’t that what he was getting paid for?
June 10th, 2009 at 6:57 pm
I suspected that Lewis had some hard proof about what went down. He is at least smart enough to know that if you are going to make such allegations you need uncontroverted evidence. I suspect that he may also have some tape recordings too. Probably at his attorneys’ office. He is lucky they didn’t Wack him.
June 10th, 2009 at 7:03 pm
confidence, baby
confidence game
conman/conmen
June 10th, 2009 at 7:09 pm
Call me a few names; give me $45 Billion?
I’d take that deal.
June 10th, 2009 at 7:26 pm
Reckless and feckless. How does this man still have a job?
June 10th, 2009 at 7:28 pm
@JohnnyVee: They still could whack him. Wouldn’t be hard. A little traffic accident?
June 10th, 2009 at 7:29 pm
On another off-topic note (sorry, BR, had to share): Saw a fantastic bald eagle up close on my walk with the dog down at the lake a short time ago. Sat and stared at each other for a while. Was able to get really close too. I think it’s a sign. Bull market marches onward. USA! USA!! US of AAAAAAAAAA!!!!!
June 10th, 2009 at 7:39 pm
*Reckless* was buying Countrywide and then Merrill.
Weaseling out would have been intelligent.
This is a bigger indictment of the powers-at-be than BAC management – which, by the way has been moronic in its own right.
June 10th, 2009 at 7:45 pm
Are there some articles anyone can recommend regarding what happened to Henry Blodget? I would like to find out a bit more about that guy besides what shows up on The Business Insider.
June 10th, 2009 at 7:45 pm
BR: Can we get a post on the absolutely ridiculous Cash for Clunkers legislation that passed the house and is going through the senate now? I’m really itching to rant on the topic and would appreciate the appropriate forum.
June 10th, 2009 at 7:46 pm
GOT 12 bits this story is swept under the rug……. 1st. time this happen, got a ring from a broker in Saratoga has a nice place for us…. damn,even the rich ain’t going to the SPA.
June 10th, 2009 at 7:46 pm
BR, was reading “Casting Blame” of the good book today. Did David Learah (“Are You Missing the Housing Boom?” and NAR economist/cheerleader) not make the cut? I bet there’s a few folks who bought his book in 2005 and now would be inclined to throw it at him.
June 10th, 2009 at 7:46 pm
“The emails confirm Mr. Bernanke was willing to threaten Mr. Lewis’s removal as CEO if he reneged on the Merrill deal and later sought assistance.”
Clear example of fascism (centralized control of private enterprise and repression of opposition). In this case through coercion.
June 10th, 2009 at 7:54 pm
Manwich says: “Saw a fantastic bald eagle up close on my walk with the dog ”
Well la dee DA! I went out to the alley to take the trash out last night and *I* saw a rat the size of my cat.
Seriously though, that’s very cool. What state do you live in?
June 10th, 2009 at 7:57 pm
@Thor: Minneapolis, Minnesota? You betcha. I remember those days of dodging rats in NYC. Had a park next to my apartment building in NYC on West 17th Street. At dusk it was dangerous to roll through there, as the small dog-sized rats would descend on the garbage cans. Gross. I miss other things about NYC but not that.
June 10th, 2009 at 7:58 pm
Fiat buys Chrysler
hmmm, fiat, somehow that does not sound good
would it now sound better if Au bought Chrysler?
June 10th, 2009 at 8:05 pm
I wonder why anyone cares what the Fed personnel think? (Like they have clean hands and pure thoughts in this collapse.)
June 10th, 2009 at 8:06 pm
Manny,
i’ve started some bird watchin’ down here in H-town
big flood in the park where i ride my bike a few weeks ago and they had to close it
the migrating water birds took over – absoultely awesome – 100’s of them – great white egrets, roseatte spoon bills, etc…after the park drained a bit, i rode my bike with the birds – just the birds and i, and they were taking off majestically as i rounded each corner – then a cop came and kicked my ass out…still awesome – mine that bird
June 10th, 2009 at 8:53 pm
There are bald eagles in the tidal basin (in front of the Jefferson Memorial) in downtown DC. Now that’s a cool sight to see.
June 10th, 2009 at 9:05 pm
Marcus-
thanks for the tip- I’ll have to take a spin downtown here soon to take a peek
Wes @ 8:06
that is probably the longest comment I’ve ever seen you post- must have been quite an experience to get all those words out of you in one post- j/k – also-
my guess- Fiat/Chrysler- Fiat will be saying before long “why, why . . . what were we thinking”
June 10th, 2009 at 9:37 pm
Wondering how long the crooked Fed and GS hold this market with our TARP money…when would they consider using that money to create actual jobs?
June 10th, 2009 at 9:44 pm
Must be bird day.. I saw two pileated woodpeckers outside my house today. One of the peckers was trying to do his thing on my house.
June 10th, 2009 at 10:08 pm
ahab@9:05 -
yeah, i was really letting go there
High Island is even better, but since Ike it is not so sweet
fiat, not Fiat
June 10th, 2009 at 10:10 pm
Moss @9:44 –
those guys are good lookin’
wasn’t that “Woody the Woodpecker” ?
do you remember that cartoon?
June 10th, 2009 at 10:13 pm
Now that you’ve mentioned it, Wes, I think that when Fiat buys Chrysler, it should create a new model in honor of Tim Geithner: the Fiat Currency!
June 10th, 2009 at 10:29 pm
for you $ traders out there – here is a great chart- thanks to Jesse’s Americain Cafe-
http://3.bp.blogspot.com/_H2DePAZe2gA/Si8awO1Zh3I/AAAAAAAAJPo/S-HEMFLxiXA/s1600-h/DXLT.PNG
June 10th, 2009 at 10:30 pm
Taking Stock: Lessons from History, MarketPlace [audio]: Kai Ryssdal: …Anna Schwartz [is] 93 years old, an economist for more than 60 of them. Still working, every day, at the National Bureau of Economic Research in New York City. Her area of expertise is monetary policy… Specifically, she’s an expert in how the Fed blew it during the Great Depression… When I sat down with her in her office…, she made it clear she’s none too happy about all of Washington’s bailouts, or how the Fed and the Treasury chose who got one and who didn’t.
Schwartz: I think both Bush and the Obama administration have not been as hard headed with banks, it has been too lax. And instead if they had said if you cannot raise capital in the market, there is no reason for the government, the people of this country, to provide capital.
I say let’s make Anna Schwartz Treasury Secretary ( get rid of Geithner ) or Head of Fed ( get rid of BB )
Economists View has full post on Anna Schwartz: The Fed’s Performance “Has been Disappointing”
June 10th, 2009 at 10:37 pm
powerful statement- compliments Jesse’s Americain Cafe-
“the manipulation of risk for the benefit of the few, and the transfer of that risk to the public and the rest of the world, has tremendous value to the powerful status quo.”
to the point and well said
June 10th, 2009 at 10:38 pm
km4@10:30 –
i second your nomination!
June 10th, 2009 at 10:45 pm
ahab@10:37
ish, sal, etc…luv ya’ man,
that was the funniest night…
i think that is what we have been talkin’ about, no?
June 10th, 2009 at 10:50 pm
as a famous gladiator once said (the movie of course)-
“Are you not entertained?”
always happy to keep the merry band in stitches
June 10th, 2009 at 10:53 pm
Hasn’t anyone learned by now that their emails are going to be scrutinized?
Anyone in a position of power should know this.
Hell, even George Bush knew that.
June 11th, 2009 at 5:24 am
I’d love to know what the rituals of passage are for entrance to the bankers big boys club. It is odd how although Ben is one of the biggest boys he doesn’t get the best toys. How does one square that? Is power it’s own reward? I guess so.
June 11th, 2009 at 6:33 am
BTW…did you actually read the beige book yesterday…?
http://www.bespacific.com/mt/archives/021557.html
June 10, 2009 – Summary of Commentary on Current Economic Conditions by Federal Reserve District. Link to reports by Districts.
“Reports from the twelve Federal Reserve District Banks indicate that economic conditions remained weak or deteriorated further during the period from mid-April through May. However, five of the Districts noted that the downward trend is showing signs of moderating. Further, contacts from several Districts said that their expectations have improved, though they do not see a substantial increase in economic activity through the end of the year. Manufacturing activity declined or remained at a low level across most Districts. However, several Districts also reported that the outlook by manufacturers has improved somewhat. Demand for nonfinancial services contracted across Districts reporting on this segment. Retail spending remained soft as consumers focused on purchasing less expensive necessities and shied away from buying luxury goods. New car purchases remained depressed, with several Districts indicating that tight credit conditions were hampering auto sales. Travel and tourism activity also declined. A number of Districts reported an uptick in home sales, and many said that new home construction appeared to have stabilized at very low levels. Vacancy rates for commercial properties were rising in many parts of the country, while developers are finding financing for new commercial projects increasingly difficult to obtain.”
….In Bernankespeak, this reads pretty miserable to me..
June 11th, 2009 at 7:52 am
its like lookin’ at dried out weeds and callin’ ‘em green shoots
June 11th, 2009 at 8:45 am
[...] Last night, we mentioned the Fed’s emails trashing BofA CEO Ken Lewis. [...]
June 11th, 2009 at 10:00 am
[...] // Last night, we mentioned the Fed’s emails trashing BofA CEO Ken Lewis. [...]
June 11th, 2009 at 10:08 am
‘Hell even Bush knew that’
He sure did and made sure that no one could find them.
http://en.wikipedia.org/wiki/Bush_White_House_e-mail_controversy
June 11th, 2009 at 11:33 am
You really should read…
http://www.businessinsider.com/henry-blodget-fed-emails-trash-ken-lewis-suggest-bofa-deceived-shareholders-2009-6
http://market-ticker.denninger.net/