Some clumsy and random thoughts on Bank of America...
- Its been floated around that the government cut some sort of deal with BofA to buy Merrill Lynch. That makes zero sense. Why would the Treasury pledge money to bail out Merrill on the same day they were refusing to help Lehman?
- What makes more sense is that the government offered BofA some help sometime in October or November to assure that the Merrill transaction was completed. In other words, once they saw how badly they had f'ed up by not bailing out Lehman. It might explain why Bank of America suddenly decided to fully guarantee Countrywide debt out of no where. That could have been part of the bargain.
- Some of the speculation about a cloak-and-dagger government deal centers around the seemingly exorbitant price Ken Lewis decided to pay for Merrill. But didn't he do the same thing with Countrywide? Bought a company that, while potentially valuable, could have obviously been had for less?
- I can't see how Ken Lewis keeps his job now. Bank of America would be in great shape had they simply not been so aggressive in acquiring CFC and MER. Compare his actions versus Jamie Dimon (Bear Stearns and WaMu) and John Stumpf (Wachovia). Both got valuable new pieces at rock-bottom prices, whereas Lewis seems to keep bidding against himself.