Posts filed under “M&A”

Time to Fire Ken Lewis of Bank of America

Step right up to the bar here in Bailout Nation, 2009 version. Open 24 hours, we never close. No bailout too big, no investment/money pit too dumb. Yes folks, we can handle your bad assets, recapitalize your bank, no muss, no fuss. Yes, here in America, we cannot be bothered with things like plans and strategies and maximizing returns for taxpayers.That’s right, we avoid the planning, and pass the savings onto to you, the home viewer!

Really, how the hell did we ever win WWII?

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So the horrific deal Citibank cut with Treasury was a blueprint, an example for the next foolish investment — and here it is: Bank America, a supposed good bank, that couldn’t wait to get their hands on Merrill Lynch, now a bad bank.

And now that we all see what a terrible decision that was by supposedly sophisticated private sector players, well, then rather than take the hit, BoA has their grubby hands out begging for some taxpayer loot to paper over their idiotic decision-making. First they bought that giant manure pile CountryWide, and now they own another stinking pile of enzyme-free donkey-fazoo, Merrill Lynch.

I say, fuck ‘em. Why do I have to pay for their bad judgment?

Enough already! Fire Ken Lewis, he’s a bum. He’s made several horrific acquisitions, and needs to serve up his head on a platter for his god-awful lack of judgment. Toss out the entire Board of Directors, too, as they all suck. They’ve bankrupted the company, its time they all need to go.

Making matters even worse, this shitpile has been building up since last month. The WSJ reports:

The U.S. government has agreed to commit billions in additional aid to Bank of America Corp. to help the nation’s largest bank by assets close its acquisition of Merrill Lynch & Co., according to people familiar with the situation.  Discussions over these funds began in mid-December when Bank of America approached the Treasury Department. The bank, already the recipient of $25 billion in committed federal rescue funds, said that it was unlikely to complete its purchase of the ailing Wall Street securities firm because of Merrill’s larger-than-expected losses in the fourth quarter, according to a person familiar with the talks.

Hey Lewis, you bought it, its yours, leave us out of your mess!

Don’t look now, but here comes the year’s most overused phrase: systemic risk:

“Treasury, concerned the deal’s failure could affect the stability of U.S. financial markets, agreed to work with the Charlotte, N.C., lender on the “formulation of a plan” that includes new capital from the $700 billion Troubled Asset Relief Program, according to the person familiar with the talks. The terms are still being finalized, this person said. Details are expected to be announced with Bank of America’s fourth-quarter earnings, due out Jan. 20.

Any possible arrangement might protect Bank of America from losses on Merrill’s bad assets. There would be a cap on the amount of losses the bank would have to absorb, with the federal government being on the hook for the remainder, said one person familiar with the matter.”

What a joke this has become. Are we supposed to be somehow comforted that the Federal Reserve and the Federal Deposit Insurance Corp., alongside the Treasury, are involved in the negotiations? They  do not seem to have clue.

Time for an orderly liquidation: Start with Citi, move on to BofA, fire the execs, toss the Board, spin out the assets to competent managers who now how to manage risk and avoid excess leverage.

ENOUGH ALREADY ~!

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Sources:
Bank of America to Get Billions in U.S. Aid
Deal Is Said to Be Reached on Fresh Bailout Cash; Lender Told Government It Needed Funds to Absorb Ailing Merrill Lynch
DAN FITZPATRICK, DAMIAN PALETTA and SUSANNE CRAIG
WSJ, JANUARY 15, 2009

http://online.wsj.com/article/SB123197132814683053.html

Category: Bailouts, Credit, Derivatives, Federal Reserve, M&A

MarketWatch Hot Stocks: Citigroup

Shares of Citigroup highlight the pressure facing bank stocks Tuesday, as investors prepare for a bleak earnings season. Greg Morcroft reports.

1/13/2009

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

Breaking Up Citi

via NYT via WSJ > Sources: Citigroup Plans to Split Itself Up, Taking Apart the Financial Supermarket ERIC DASH NYT, January 13, 2009 http://www.nytimes.com/2009/01/14/business/14citi.html Citigroup Ready to Shrink Itself by a Third DAVID ENRICH WSJ, JANUARY 14, 2009 http://online.wsj.com/article/SB123185686674677225.html

Category: Corporate Management, Digital Media, M&A

Too Big To Succeed . . .

If they are too big to fail, make them smaller.” -Nixon Treasury Secretary George Shultz about Fannie Mae and Freddie Mac > The operative expression about many of the bailouts we have seen — AIG, JP Morgan (via Bear Stearns), Goldman Sachs, Fannie/Freddie and of course Citibank — is “Too Big To Fail.” Perhaps the…Read More

Category: Bailouts, Corporate Management, Credit, M&A, Regulation

Citi-Morg

> That’s what you get when you merge Citigroup and Morgan Stanley . . . >

Category: Humor, M&A

Doug Kass’ Possible Improbables

Every year, Doug Kass creates a list of forecasts. But these are not straight predictions; the basis of Kass’ column is that these are ideas that most people think are very unlikely, which that Doug believes has a better chance of occurring than the crowd does. Call them “Possible Improbables” Here’s the list: 1. The…Read More

Category: Economy, M&A, Markets

Cost of Banks

Consider that one year ago Royal Bank of Scotland paid US$100 billion for ABN Amro. That seemingly impossible amount would now buy: Citibank $22,5 billion (74% down) Morgan Stanley $10,5 billion (-72%) Goldman Sachs $21 billion (-67%) Merril Lynch $12,3 billion (-77%) Deutsche Bank $13 billion (-71%) Barclays $12,7 billion (-71%) And still leave $8…Read More

Category: Bailouts, Credit, M&A, Regulation

Warren Buffet on Charlie Rose

Here is last night’s Charlie Rose Show, with WB speaking for an hour.

Category: Credit, M&A, Markets, Video

32-Floors of Anxiety

Category: Credit, M&A

A Very Expensive Berkshire/Goldman Deal

Category: Bailouts, M&A