Ken Lewis Has The Cape On, Again

Look what just popped up on Briefing.com:

AMBAC Fincl: Bank of America discloses 7.1% stake in SC 13G filing

Are you kidding me? The Bank's CEO Ken Lewis is playing superhero yet again. Now, 7% of ABK isn't that large of an investment for bank that was clearing over $1 billion a month last year. They've probably dumped no more than $70-$100 million into the sinking bond insurer. Nonetheless, the fact remains Ken is still throwing around money like a horned drunk at a strip bar - make that he's throwing around SHAREHOLDERS' MONEY.



Now, I am well aware that bankrupcy or even downgrades of these bond insurers (the other one being MBI) could very well cause a larger financial panic and that BAC theoretically has a financial interest in their solvency. In other words, the $100 million or so they donated could in fact be a legitimate use of funds. BUT, Kenny's track record has strained his credibility and now shareholders have to be concerned how much more ABK he'll buy. Remember, when his investments plummet, he simply buys more, a la Countrywide Financial.

If you haven't already, make sure you read my old post Bank Of America's Ken Lewis - Socialist Hero, Shareholder Villain. Let's just say that more than a few interested folks from the Charlotte-based bank have already read it.

By the way, Wall Street is betting on an ABK bankruptcy - 35% of its float is currently shorted.

Prediction - By February 2010, Ken Lewis is gone from BAC.

UPDATE - Just in the nick of time to satisfy my prediction, Kenny is gone as of Decemeber 31,2009! See - RIP - Ken Lewis.