Taxpayers stuck with what now looks like a $45 BILLION to make the deal work. Well, those investment bankers did work a long weekend to put together a deal that could only work after massive government subsidies and they probably had their annual bonuses trimmed back a bit, so that's fair. Just because the already too-big-to-fail businesses are even larger now and that the ultimate US mega-bank (Citigroup) is being chopped into pieces and sold because they were too big, why not hand out more to delay the inevitable overhaul of Bank of America? Yea, they're probably going to fire even more people with this merger but I haven't heard of employment being much of an issue today.
Who doesn't want to sacrifice $20 million to help a poor, starving investment banker? Anyway, it's probably not any business of Congress to ask questions so I guess it's OK.
But BofA's latest problems also add to the questions that have been swirling about the bank's decision, reached early on the morning that Lehman Brothers collapsed in mid-September, to pay billions of dollars to acquire Merrill. The big brokerage firm has been hit hard by bad bets on mortgage-related securities.
BofA completed the Merrill deal Jan. 1 - but only after receiving assurances that the government would help defray losses tied to the Merrill deal, The Wall Street Journal reported late Wednesday.
But CEO Ken Lewis' decision to buy Merrill isn't the only thing that looks questionable now. So does the advice he and the BofA board got on the hastily arranged Merrill deal from the bank's advisers, Fox-Pitt Kelton and J.C. Flowers & Co.
