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Ken Lewis, the embattled CEO of Bank of America, has recently admitted to being coerced by U.S. Government officials to consummate the Merrill Lynch acquisition. The problem for Lewis is he may have neglected his fiduciary responsibility to shareholders in bowing to this pressure. The SEC is now investigating. See the video [...]

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I want to make clear the significance of the Treasury’s Chapter 11 bankruptcy plan for Chrysler if Fiat pulls out.  It will mean massive job losses and and a huge down-tick in consumer demand.  There will be no second half recovery. Geithner and Obama will look very much like greenhorns and lose a lot of [...]

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Bank of America CEO Ken Lewis is fighting to keep his job because earnings at his company have plummeted. BofA’s acquisition of Merrill Lynch has been a large part of the problem.  Now, understanding that he is being made out to be the fall guy, he has fessed up that BofA was coerced into the [...]

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Dunfermline, the largest uilding society in Scotland was forced into the hands of the Nationwide.  This happened only after the U.K. government was forced to pony up 1.6 billion pounds – not the best of news for Gordon Brown before a major world summit.
As the Times Online says:
The state-backed rescue brings to six the number [...]

Last summer, as a number of sinister revelations were made about the goings-on in the financial services sector, I speculated that we would definitely see the government going after individual executives for illegal activities. I saw Angelo Mozilo, the man with a tan, as the most likely scapegoat – a mortgage industry Ken Lay, if you will (see my August post “Ex-Countrywide CEO is the new Ken Lay“). Yet, none of this came to pass.

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Chris Whalen, a well-regarded bank analyst, ran an interview piece with Nouriel Roubini on Barry Ritholtz’s site. The conversation was very illuminating and I highly recommend reading the whole post linked below. However, I wanted to point out a quote from Chris in the piece that I find significant in light of the recent dividend [...]

Merrill Lynch is looking like a real dog these days — much more than I realized back in September. As bearish/cautious as I have been on the economy and the financial sector, obviously I was not cautious enough. When the deal got done I had this to say:

As the financial industry further unraveled yesterday, Mathieu Robbins of the Irish Indendent asked a worthwhile question: Was RBS the idiot company of all-time in buying ABN Amro at the top of the market? Robbins says no and offers up nine other equally monstrous deals that all went seriously pear-shaped to prove it.

Now that the government has bailed out Bank of America, I want to remind you that this Bank is a serial acquirer and that the Merrill acquisition is not the only boneheaded move by Bank of America.

The statements coming from Meredith Whitney in this video interview with CNBC’s Maria Bartiromo could not be more blunt: the financial serves sector is weak, needs bailout money and investors will be diluted. As a result, she expects selling pressure to continue. She also mentions that a number of shotgun weddings are likely in order to stave off bankruptcy amongst weaker firms – the unstated quid pro quo obviously being bailout money for the acquirer.

This is a very good video to get a broad sense of the state of financial services.