Just watching this stuttering-cum-bubble Lewis on TV makes me sick to my stomach. I would love to see him on an episode of Lie to Me... where a facial expression expert would tear him apart. lol
Show me a specific example of a Fed chairman doing what the Fed did to a bank. The Fed, to my knowledge, has never forced one bank to buy or run of receive assets of another bank when they go belly up. They ask. They don't force. Huge difference. Espcially with a publicly traded company, with millions of small and large shareholders, with a stock price in the double digits, as BOA's. Like between a liberal representative democracy and totaltarism. The Fed effectively deliberately wiped out the capital of BOA to try and save their own political asses. Quite possibly the biggest single screwing of an American by the American government that I have ever seen. Quite scary because it means they could do this to any company. Stepped way over the line. Total abuse of power. You can even tell they knew it by the ay they were hedging what they were saying explicitly.
The Fed routinely 'asks' banks to cut dividends, raise capital, get rid of bad bankers, ban people from the banking industry, order banks to be shutdown, etc http://www.federalreserve.gov/newsevents/press/enforcement/2009enforcement.htm Lewis was acting like a reckless banker, he signs to buy a company levered 30-1 with toxic garbage and gets cold feet when the assets go down? His actions were threatening the stability of the US financial system. The fed, as part of their regulatory duty, had the authority to ban him from banking, even if he was running a bank that had enough capital by regulatory standards
I'm a little confused. Lewis ran BofA - one of the reasons we're in this mess. How did he suddenly become a hard done by hero?
I am with Daal on this... Had Lewis been allowed to pull out of the deal, the consequences in the mkt would have been absolutely staggering. If he hadn't agreed initially, that would have been a different kettle of fish. But for him to change his mind in the middle of the biggest ever sh1tstorm is just not acceptable. The Fed, in my view, did absolutely the right thing.
The same folks that wanted the gubment to do nothing, let it all fail, are the ones who are eventually found hanging in closets, genitals bound. They like to live on the edge.
I repeat show me a case where the Fed ordered a bank to take over another one or the board and senior management would be ousted. Has never happened. Ever. Not even close.
Explain specifically how the consequences, specifically, would be staggering if someone else had bought ML at a lower price, a la Bear, or not at all, a la Lehman? What would happen besides ML shareholders getting wiped out and bond holders taking a huge haircut? You are parroting the same scare-speak that Wall Street peddles to keep their jobs. Hell, I would do the same thing. Gimme me money, bail me out or else the sky will fall. Trust me: no one on the Street or in banking really believes this. Just retail traders, CNBC, the idiot American public and Congress, which has been bought and paid for by Wall Street to believe it.
I suppose it could be argued that the Fed and Paulson forced the merger to "save the system". But Lewis is still on the hook for violating his fiduciary duty to the bank's shareholders by not telling them how big a hole Merrill was going to blow in BofA. Unfortunately for him, the only other option he had was to refuse and resign, which he obviously didn't take.
They forced the merger not to save the system -- that is total PR and bullshit. They did it to save ML. That's all. And they didn't give a shit if BOA shareholders got screwed. Read Walsh's memo. What the fuck is the Richmond Fed president doing giving lame-brained M&A advice?