Ken Lewis and a few sell-side shills are the only folks who are trying to spin Countrywide as a victory
I wouldn’t consider it a victory. I think that Ken Lewis jumped the gun. I wish he had picked the desired assets after Countrywide BK or as a process of the BK. I don’t think many banks were comfortable enough to belly up to the table during this portion of the credit crunch and bid on those assets. This way he could shed the liability portion of Countrywide, or at least had a chance to cherry pick. I don’t think it is as bad as some people claim, but it is no victory.
If I remember correctly, BofA also loaned Countrywide about $2Bil near the start of the credit crunch. This had me scratching my head.
I can understand why Ken Lewis was looking at Merrill. BofA got Quick&Reilly to get the investment banking ‘arm’.. but Q&R was mostly personal and smaller accounts. Merrill would give them commercial. The problem is the price. I suspect the issue with Merrill was Ken Lewis jumping the gun again (like with Countrywide) combined with Merrill misrepresenting the state of its books. MAC was a way out until the Fed stepped in with the shotgun.
My opinion on Ken Lewis is that he is really no better nor no worse than many other bank CEOs. There are many that sank their ships. I do worry about who is going to be next. I also think that Ken Lewis was way overpaid for what he did, but I think that of a lot of CEOs. I think that most of the CEOs compensation should be in growth of their company (ie ownership of common), not salary, in-money-options etc.
BofA is a giant black hole of risk that is unanalyzable.
I think that this applies to more than just BofA.
Ask Warren Buffett… he’s only down 70% on his BofA position.
I think he may be down more than 30%.. he was buying when it was in the 30s (price before Countrywide and Merrill). It is presently bouncing between 16 and 17. I haven’t checked to see if he added to his position in March 09 though.
