Bank of America Round One.
You may have noticed over the weekend that the CEO of Bank of America has claimed that former Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke forced Bank of America to go forward with their merger with Merrill Lynch even after it became apparent that Merrill was hemorrhaging cash. Now John Thain has entered the mix. Market Talk reports the following:
"The back-and-forth squabble between BofA CEO Ken Lewis and former Merrill Lynch chief John Thain has reached new - and rather immature -levels.
It started last week when WSJ reported that Lewis, under oath, said he was forced into making the Merrill acquisition. Now, Thain has fired back at BofA, saying the bank lied about its role in the huge bonuses and losses at Merrill.
Lewis’ comments see to be “utter and shameless nonsense, an attempt to worm out of responsibility,” FusionIQ CEO Barry Ritholtz writes on his blog, noting Lewis is only making excuses for a terrible acquisition. “Its the sort of weasely responsibility evading CEO speak we have come to expect these days.”
But just because Lewis’ comments might be outlandish doesn’t mean Thain’s a saint either. Quite the contrary, in fact, as his latest comments suggest he’s taking an immature path to defending himself.
Thain’s bad-mouthing of his former employer shows he’s making “the basic mistake of a snippy college kid” who got fired from his first job, Scott Reeves writesat Minyanville.
“Thain plays into the populist disdain by saying, in effect, ‘I didn’t do it, so don’t blame me,’” Reeves says.
Instead, Thain shouldn’t have commented at all on BofA. “If Thain is more or less right, the facts will speak for themselves and those who care about the issue will figure it out,” Reeves notes.
It’ll be interesting to see how all this plays out, but in the meantime, Ritholtz says this is all starting to look like a variation of the prisoners dilemma.
“Both parties would probably be better off if everyone kept quiet, but each individual party is better off confessing than remaining silent,” he says. “And both of these guys cannot be telling the truth.' ”
It started last week when WSJ reported that Lewis, under oath, said he was forced into making the Merrill acquisition. Now, Thain has fired back at BofA, saying the bank lied about its role in the huge bonuses and losses at Merrill.
Lewis’ comments see to be “utter and shameless nonsense, an attempt to worm out of responsibility,” FusionIQ CEO Barry Ritholtz writes on his blog, noting Lewis is only making excuses for a terrible acquisition. “Its the sort of weasely responsibility evading CEO speak we have come to expect these days.”
But just because Lewis’ comments might be outlandish doesn’t mean Thain’s a saint either. Quite the contrary, in fact, as his latest comments suggest he’s taking an immature path to defending himself.
Thain’s bad-mouthing of his former employer shows he’s making “the basic mistake of a snippy college kid” who got fired from his first job, Scott Reeves writesat Minyanville.
“Thain plays into the populist disdain by saying, in effect, ‘I didn’t do it, so don’t blame me,’” Reeves says.
Instead, Thain shouldn’t have commented at all on BofA. “If Thain is more or less right, the facts will speak for themselves and those who care about the issue will figure it out,” Reeves notes.
It’ll be interesting to see how all this plays out, but in the meantime, Ritholtz says this is all starting to look like a variation of the prisoners dilemma.
“Both parties would probably be better off if everyone kept quiet, but each individual party is better off confessing than remaining silent,” he says. “And both of these guys cannot be telling the truth.' ”
I'm going to have more to say at a later date about this whole Bank of America debacle and how it relates to shareholder rights. None of it by the way is good for the likes of you and me. Somebody here isn't telling the truth. For his sake I hope it's not Lewis that's the liar.
*Long for 2 clients legacy positions in Bank of America.
posted by CR English at 10:22 AM
<< Home