I read the article about Merrill and BoA. I have a personal interest in what BoA did. I purchased BoA shares about 3 years ago, because I wanted some exposure to TBTF banks, and I figured that of that group, they had the least exposure to bad RE loans.
Then that schmuck Lewis took on Countrywide (and actually paid a handsome price to take them on, to add insult to injury), blowing my entire strategy. But that wasn’t enough for this idiot. He went on to absorb Merrill Lynch, even paying a colossal price for a firm with negative equity.
So now his protestations that he was forced into the Merrill deal sound very weak to me. He wasn’t forced into either deal: he chose to go into both. He can only blame himself for that, and we can blame him too, and we should hold him accountable.
What bugs me most is that, when Lewis finally began to realize his mistakes, and considered salvaging some value by backing out of the Merrill deal, a threat from Paulson to remove him and the board caused them to roll over and go ahead with a deal they knew, or should have known, would destroy BoA shareholders’ value. These folks, who are supposed to be charged first and foremost with protecting the shareholders’ interests, knowingly chose their own jobs first. In a country with a proper rule of law, these folks would all be looking at the world through vertical bars.
