Bank Of America Corp's CEO Ken Lewis said something last month that might render insight into his derangement. Via the Bank's spokesperson Robert Stickler:
"Mr. Lewis went through a number of scenarios and indicated that we feel the most likely scenario is one in which the economy does not deteriorate significantly," said Stickler, who attended the meeting with Whitney. "In that scenario, we wouldn't have to cut the dividend."
There you have it!
With oil up 100% year-over-year, food prices screaming, real estate prices devastated in much of the country, and unemployment rising, Ken Lewis doesn't think the economy will "deteriorate significantly". He's a perma-bull!
Even if this ridiculous bottom-call is correct, I submit that it's irresponsible for a CEO to manage a company with such an optimistic bias. He ought to prepare the Bank for *rainy days* as well - of course it's up to the board to keep him in line. This egomaniac can't even run his own bank yet has arrogance enough to make macroeconomic forecasts - and not to mention weather forecasts.
BAC closed yesterday at $21.53 - which is essentially a 12 year low (ignoring a brief blip on 9/11).
How many of y'all shorted it with me when I gave you the look?
Kenny, the market has spoken, and it's branded you a Moron!
(By the way, there's some weird thing going on where Ken might be trying to replicate with Countrywide what his predecessor Hugh McColl Jr. did in with First Republic Bank in Texas back during the 1988 real estate plunge. Read it here and form your own hypotheses.)
3 comments:
I didn't short this pig when you said it (in January?) but I think you could STILL short it and make some bank. Take a look at First Marblehead - brutal. I think you mentioned that one too.
Amazing... this may help explain BofA's acquisition of CountryWide. Although, may take still is that they just bailed themselves out of a bad loan/investment. With shareholders bearing the cost. If they had written off CountryWide to what I estimate to be atleast $5bb Lewis would have likely been shown the exit. I have commented on the transactions several times at http://martensonbusiness.blogspot.com
west coast,
FMD was one of my longs! Only lost a little on it - thankfully.
richard,
Kenny will (should be) gone when the dividend is cut. But this BOD is so incompetent, they may well let this buffoon stay on. Nothing would surprise me from this cast.
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