The Daily Bail

I remember the weekend in question last September very clearly.  Fannie and Freddie had failed. AIG was teetering.  A meeting was called, ostensibly to find a buyer for Lehman Brothers (Barclays ultimately balked at the absence of Fed assistance-sharp Brits!), but the surprise was Ken Lewis hooking up with John Thain, and Bank of America buying the tangled morass that was Merrill Lynch.

BAC paid a huge premium for Merrill and that outrage notwithstanding, the purchase itself was the most idiotic in the banking space since Wachovia gorged on Golden West Financial at the peak of the bubble in May 2006.  Every soul on the street outside of Bill Miller knew Lewis overpaid and that Merrill's balance sheet was a radioactive nightmare. The criticism was so uniform in the days that followed that we assumed that it had to have been an 'encouraged marriage.'  Lewis couldn't be so dense as to believe he struck a good deal.

I think the jury is still out on whether Lewis was prodded to do the deal, or even whether he was offered future assistance from the FedTreas if he agreed to take on Merrill's liabilities.  Regardless, Lewis still overshot massively. Granting a premium for Merrill at the time was a low point in bank deal-making history, and offered a hint that he had lost his mind. He and his board should not be approved by shareholders when they vote next month. 

And then there was today.  A day of rare, exquisite joy as the 'he-said, he-said, he-said' romp around the Cuomo subpoena was played out before millions of smiling viewers.  Cuomo, Lewis, Bernanke and Paulson.  It couldn't get any better for payback junkies.  But then it did. There were rebuttals, contradictions, restatements, and denials. It was a good day for the home team, a day for laughing and smirking and feeling that maybe, just maybe, the guilty will be punished after all. 

Without polling, I believe most of us desire intense social and psychological pain for one man in particular, Henry Paulson.  And for once, we got what we wanted. 

Here's a toast to today's circus and to the dream that Bernanke is not re-appointed, that Paulson is indicted, and that Ken Lewis loses his motherfreakin'  J-O-B.

Harrruuuumppphhhh.  

bank bailouts, bailout, bail out