Everybody is focused on the Lehman/Merrill destruction and the repercussions for the financials. How about the repercussions for BofA? I hadn't heard a peep about BofA or anyone else looking to acquire Merrill before yesterday. 24 hours ago I was pretty sure that BofA had a lock on Lehman.
Fast forward to now. If in fact BofA did make the decision to buy Merrill, with no government backing, in a single Sunday afternoon, one has to seriously question either their judgement or Merrill's. For the last year, Merrill has been unable to figure out how bad the balance sheet is. BofA had the balls to step in and make the bet that it's OK, and bet $50 billion of stock on it on the spot.
If the Merrill franchise is worth betting on, why didn't Merrill bet on it? Their stakes in Blackrock and Bloomberg, though not super liquid, are worth almost as much as Friday's share price. I don't get it.
Don't look now but oil is down another $4+ to $96.70.
Fast forward to now. If in fact BofA did make the decision to buy Merrill, with no government backing, in a single Sunday afternoon, one has to seriously question either their judgement or Merrill's. For the last year, Merrill has been unable to figure out how bad the balance sheet is. BofA had the balls to step in and make the bet that it's OK, and bet $50 billion of stock on it on the spot.
If the Merrill franchise is worth betting on, why didn't Merrill bet on it? Their stakes in Blackrock and Bloomberg, though not super liquid, are worth almost as much as Friday's share price. I don't get it.
Don't look now but oil is down another $4+ to $96.70.
long MER
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