Preferred

CNBC and Reuters are reporting that Bank of America CEO Ken Lewis bought 200,000 shares of common stock yesterday. The stock has gone from $3.86 to $4.80 intraday, a 25% swing.

I know it's a show of confidence to buy your own common stock into turmoil, but I wonder if there is a rule against buying the preferred. I wouldn't touch BofA common with oven mitts.

HEY!

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.

long MER

New Development

John Mellencamp, when nobody was watching or listening, (yes, nobody was watching or listening) switched from Rock to Country. Listen here.

Oh wait, I was going to write about Lehman.

No reputable news organization is in print yet as far as I can see regarding the Lehman resolution. Sounds to me as though:

1. Fuld is out
2. Lehman gets split up
3. Bank of America gets some of the best properties
4. The U.S. government has no exposure

W00t.

All or some of this could be wrong. We should know tomorrow.