Bank of America to Buy Merrill

Bank of America to Buy Merrill

online.wsj.com

In a rushed bid to ride out the storm sweeping American finance, 94-year-old Merrill Lynch & Co. agreed late Sunday to sell itself to Bank of America Corp. for $50 billion.

The deal, worked out in 48 hours of frenetic negotiating, could instantly reshape the U.S. banking landscape, making the nation's prime behemoth even bigger. Late Sunday night, the companies' boards had approved the deal, but lawyers were negotiating over last-minute details.

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[edit on 15-9-2008 by dsgross]

[edit on 15-9-2008 by dsgross]

[edit on 15-9-2008 by dsgross]

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[edit on 16/1/2009 by Mirthful Me]

With today’s flurry of financial events, I stopped to think, what’s not right about all this? And this is what I’ve come up with…

For those of you don’t know, here were the two big events of the day:

1. Bank of America bought Merrill Lynch for $44 billion.

2. No one is coming to the rescue of Lehman Brothers and it is almost certain that they will file for bankruptcy.

First up is BoA’s purchase of Merrill Lynch. Lynch’s stock closed at $17.50 Friday, but for some reason BoA is going to pay $29/share to take it over. Why, from a business prospective, would BoA pay this incredible hike when it could have waited for Merrill to collapse and acquired it on the cheap? The reason, in my eyes, is a very cozy relationship between the two CEOs. Merrill’s CEO John Thain was originally meant to have a “plain vanilla” $4 million compensation package per year, including benefits. That quickly ballooned to his now known pay of over $83 million. That, however, could rise to $120 million DEPENDING ON THE COMPANY’S STOCK PRICE. What I see here is the BoA small time investor getting royally screwed for the sake of both CEOs’ severance packages. This amounts to nothing less than extortion and I will make a call right now that both CEOs will be sitting in jail five years from now, but maybe not Merrill’s CEO Thain; he’s made over $300,000 of political contributions across the spectrum to shield himself. (He also has $300 million in Goldman stock, which could prove to be interesting).

Now let’s examine the Lehman Brothers plight. No one is coming to bail them out. Foreign banks, like Barclay’s, are slowly coming to the realization that we aren’t good for our money and are wising up to throwing good money at a broken system. Interestingly enough, not even Treasury Secretary Paulson will bail them out. He claims he is DEAD SET AGAINST IT. Well, what about the $200 billion he just threw at Fannie Mae and Freddie Mac a couple weeks ago? He had no problem throwing money at that. Why the quick change of heart? Either he’s completely incompetent and doesn’t know what the hell is going on, Bush told him to stop throwing money at everything because it’s making his “conservative” administration look blatantly socialist, even communist, or Paulson’s got a personal vendetta to see Lehman Brothers burn. After his tenure at Goldman, with Lehman as a prime competitor, it would not surprise me one bit…

Just some food for though. Post up some comments.

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[edit on 16/1/2009 by Mirthful Me]

Well what I see happening is a consolidation of the major financial centers. This way all the money will be more easily monitored and distributed, this will also make it less of a hassle if they decided to go through with the Amero.

As far as BoA paying more per share than what the stock is worth it is probably likely as to what you said about the CEO's being friendly with each other. The one guy helping out the other to have more money to convert into more stable currency.

It is a known fact that for a long time now the little guys are the ones getting screwed trying to become the major players. We saw it happen just recently with oil.

Lehman Brothers not being bailed out probably has something to do with the future of the Amero or they really don't have anything valuable to offer. So Lehman Brothers were probably cut out.

As far as the effect this has on the bigger picture is that when the American economy does crash it will be somewhat of a global depression. During this depression you can expect the government to take over the businesses.

This will give them the opportunity to go ahead and implement the chip system. Also during this time there will be massive civil unrest and almost a guarantee of civil war here in the states.

I'm sure during this "secret" meeting all of this was discussed and talks of how they were going to implement it. The time frame in which I see this happening, I have no idea. But what I do know is that this gives the PTB a perfect opportunity to give this part of the plan a kick start, you know the saying, "Drastic times calls for drastic measures."

Also hello everyone here at ATS! I'm just a new guy here on the block.

The tax payer has just footed the bill for this....nice.

$20 billion in extra funding to directly cover this loss, plus an extra $128 for anything else they need in the future - sweet.

No CEO will be investigated - that only happened once.

UMMMMM some food for thought. Our government no longer makes the rules andreg's for our markets and banking, the europeans do. We signed that baby away at the G-7 summit in New York last year.
Secondly what you are seeing is the take down of the banks that arent going to be 100% controlled. Its all being put into a nice little box with as few players as possible to make it all easier to be run. WHEN this is all over you are going to have TWO banks to choose from and Bank of AMERICA is one of them.( thats a hint by the way, who else names their major bank after their country?)