Yesterday, in - Wall Street Scalping - I discussed the plight of embattled Ken Lewis, former skipper of that financial Titanic Bank Of America.
Recall that when first grilled as to why he spent $40 billion for a bankrupt Merrill Lynch, Ken essentially said the government forced him into the bad deal. And this idiot even invoked *patriotism* as a reason he bent (shareholders) over. See - Ken Lewis - Interview Follow-up from exactly one year ago.
Alright, he was supposedly bullied into it - at least that was his initial, fall-back defensive position.
But what about now?
Here's his Moronic attorney Mary Jo White, from that same Zerohedge post:
...Lewis is being "public vilified by the political search for accountability for the financial meltdown." White also said that despite the initial problems with the merger-including the mounting losses that led to the government bailout-the merger has turned out to be an "unmitigated success for BofA." Merrill Lynch trading operations, like the trading operations of the other big banks, have taken advantage of historically low interest rates and borrowing costs to earn billions of dollars in profits, helping the banks to smoothe out losses from consumer and commercial real estate loans that continue to mount as economic conditions remain weak.
Did y'all get that?
At first he was *forced* into a bad deal.
But now, he's going to assert that Merrill is *earning billions*, i.e. that it was a good deal, that therefore he can't be guilty of misleading his shareholders.
Obviously, the Moron hired a real dunce to represent him! How fitting!
Here's my take:
At first, a reluctant Ken was indeed gulled into considering buying Merrill by the most savvy crooks on this over-heated planet.
But then, his greedy, egomaniacal eyes were popping with dreams of *stealing Merrill Lynch*, with dreams of running the largest financial concern in the world. Recall that he was always a hopelessly naive perma-bull; every red quarter he saw he figured to be *the bottom* - as far back as Q4 of 2007! So these *firmly held beliefs* triumphed over any concerns about shareholder disclosure. I still don't get why he didn't lower the price, at least a little bit.
And now he's got the gall, and the gap, to not only submit that Merrill Lynch is making money hand over fist (*billions* in trading), but that he should get credit for this homerun of a deal.
Believe me, Merrill Lynch IS NOT making any meaningful, sustainable money. Just y'all watch, when debt markets come to their senses....all sorts of *inherited*, *legacy* losses will materialize from Merrill, yet again. Remember, this is a company that lost $19 BILLION between July 07 and July 08. Wikipedia sums it up nicely, that's "...$52 million daily"!!!
In all likelihood Merrill's so-called profits today are merely *unrealized gains* on the fixed income junk they wrote down last year. Bond markets boomed in 2009; AND these banks were given license to mark the *assets* to whatever the bleep they felt like. In summary, Merrill still has the junk, still has the risk, and is hiding it *off the balance sheet* a la Wells Fargo and JP Morgan. See - Capitol Thievery.
For my Ken Lewis master link - click here.