The nerve!

No wonder Merrill Lynch was in trouble.  John Thain was its plotter-in-chief.

While Thain can be faulted for not giving a damn about public morality, he was without a doubt a brilliant strategist.  I can hear him speaking to his lieutenants in September…

…Guys, we’ve had a year of mind boggling losses and the company is headed into the shitter.  We’re all to blame because of our recklessness and stupidity.  But, shit happens.  So here’s what we’ll do.

…First we tell everyone that if Merrill Lynch goes down, it’ll take the rest of Wall Street along for the ride.  We’ve already crucified Lehman Brothers.  The street’s got no stomach for another one.

…Next, we run over to the Bank of America for lunch (their treat) and offer them a deal they can’t refuse.  I think $50 billion for us is a nice round number.  So what if we’ve lost $17 billion in the last four quarters; they’ll never notice it.  They’ve got lots of money.

…I’ll tell Kenny to put out some kind of foolish PR announcement like…

“Acquiring one of the premier wealth management, capital markets, and advisory companies is a great opportunity for our shareholders,” Bank of America Chairman and Chief Executive Officer Ken Lewis said. “Together, our companies are more valuable because of the synergies in our businesses.”

…After all, AOL did it when they acquired Time-Warner.  Nobody asked them what synergies either.

…They’ll agree to buy us for sure.

…Just to be sure the shareholders buy into this fiasco, we’ll run over to the Feds and tell them that  B of A needs a few bucks, maybe $25 billion, to cover our losses.  That’ll jack up Kenny’s share price.

…After we get the $25 billion, and because I’ve been so clever, I’ll propose a $10 million bonus for myself.  Don’t worry guys, I won’t forget you.  You’re my partners.  Forget about those 4,000 worker-bees we just laid off.  They’ve got Unemployment Compensation to tide them over.

…And just to make sure nobody finds out what our 4th quarter looks like, we’ll distribute the bonuses before December 31…instead of after January 1 like we always did.

…Oh, and have maintenance hurry up and finish the million dollar renovation of my office.  Can’t wait to throw my butts into that new $1,400 waste basket.


– 12/05/08 – Merrill and Bank of America shareholders vote to approve the takeover.

– 12/08/08 – Merrill’s compensation committee disapproves Thain’s bonus, but approves staff payouts of $3-4 billion.

– Days later: Bank of America learns that Merrill’s fourth-quarter losses were greater than expected.  B of A begins lobbying the federal government for more TARP money to ease the takeover.

– 12/29/08 – Merrill pays bonuses at least a month ahead of the usual schedule.

– 1/16/09 Treasury says it will give Bank of America another $20 billion in TARP money, to help it absorb the larger-than-expected Merrill losses.

– 1/16/09: Merrill reports a $15.3 billion fourth quarter loss.

-1/22/09  Ken Lewis has a 15 minute meeting with John Thain.  Thain resigns.

Wonder if he took his wastebasket with him.


3 Responses to “The nerve!”

  1. 1 sidney cohn January 26, 2009 at 10:47 am

    Should we move our money from B of A.? If so, where?? You seem so erudite about everything and your opinion is probably as good as anyone’s,so please help us all out. Of course, if your recommendations don’t work out, an errors and ommissions policy is probably in order. Do you think the FDIC can cover all of our bank losses should they occur or do you think their CEOs will have MADOFF with our dough?


  2. 2 Marilyn January 26, 2009 at 1:05 pm

    If all the banks and financial firms bought each other and no one was there to notice, would it be real?


  3. 3 Kenley Neufeld January 28, 2009 at 10:02 pm

    I haven’t banked with B of A since the mid-80s because they were an evil, huge giant charging too much for services. Good riddance, it seems.


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