In the tradition of the old SNL catch phrase popularized by Chevy Chase: "Generalissimo Francisco Franco is Still Dead", we humbly submit that Bank of America CEO Ken Lewis is still not fired. In other news, you gave Lewis a bunch of cash yesterday and offered up a particulary tasty asset guarantee. Take the Saturday morning click ride to see just how generous you were with the terms of the deal.
The details are out and the numbers are in-line with what had been floated the past few days: an emergency $20 billion cash injection from you through the Treasury, and an additional insurance agreement, also offered by you, through the Treasury, the Fed and the FDIC that guarantees $118 billion of some of the prettiest assets you've ever seen.
This is an outrage of course, but different in some ways from the help that you have already given to Citi, both in form and function. The headline figure of $20 billion is the same, but in the case of Bank of America, your cash gift and asset guarantee were required as a result of their whirlwind purchase of Merril Lynch just a few short months ago. In other words, you gave a bailout to Bank of America for an investment they made last quarter. Gone are the days when it would take years or even decades for large investments to turn sour on shareholders. Also seemingly forgotten are the days when only a company's shareholders would be held responsible for that company's mistakes. Now, YOU are responsible for any mistakes as long as the firm in question is deemed by Paulson and Bernanke to be 'vital to the nation's financial interest'.
A double dose from the WSJ here and here.
Here's a story we did on these issues earlier this week. And another one. And one more with some feeling this time.
Here's Yves take over at Naked Capitalism.
And finally i am linking to a piece Mish did on Bank of America earlier in the week. As usual, he takes a relaxing look at the bailout drama as it unfolds.
See Also:
Ken Lewis Wants More of Your Money...Banc of America Part Deux
Banc of America Jealous that Citi Was Getting All Hank's Attention
Henry Blodget Wants Ken Lewis' Head on a Platter...Preferably Warm