What shareholders would be the the mood for any deals in this environment? Really, it is damn ugly out there. No surprise then that Bank of America shareholders are about as interested in acquiring Merrill Lynch as a kick in the taco. Actually, though said kick has lingering effects, these are still smaller than the Merrill Lynch acquisition would be, meaning that a kick in the taco would be preferable to the Merrill Lynch acquisition. (At least according to a draft of the full page Wall Street Journal ad before the editing committee got a hold of it. Kicking is too mean to put in the Journal, it seems).
There is a sort of self-fulfilling prophecy aspect to this whole thing. Acquiring shareholders grow upset over the widening spread between current share price of the target and original offer. Shareholder approval looks less likely. Arbitrage players press spread wider, acquiring shareholders get even more upset over the widening spread between current share price of the target... etc. etc. etc.
I wonder what our government's financial supermen and superwomen will do if that deal begins to crumble too. Backstop funding perhaps? That seems to be the most popular arrow in the quiver these days.
Merrill Flinch [New York Post]
Posted by guest , Nov 24, 2008 10:51AM
I have never been kicked in the taco, but I have been kicked in the burrito.
Posted by guest , Nov 24, 2008 11:21AM
wideclops has a huge taco
Posted by guest , Nov 24, 2008 11:21AM
John Thain is a fraud. ("We don't need to raise additional capital.") Would be beautiful to see this deal fall apart.
Posted by Seaman Bodine , Nov 24, 2008 11:36AM
dude if BAC / MER falls apart, MER, MS, and GS all get crushed...because there's nobody left to party with
imagine how fucked this would be if C had actually pulled of the WB trade?
Posted by guest , Nov 24, 2008 11:38AM
taco = vag ??
Posted by guest , Nov 24, 2008 11:41AM
Melissa Francis would salute your usage of taco.
Posted by guest , Nov 24, 2008 11:42AM
Oh - poor poor banking industry - what if we cut off the easy money they got addicted to during the bubble?
They are like out of control drug addicts with a $10BB a day habit, while they are throwing people out on the streets to feed their habit:
http://yourmortgageoryourlife.wordpress.com/2008/11/04/a-hardship-letter-to-countrywide-family-on-the-brink-of-disaster/
Screw them! It's out money, and while I am not for bailing out anyone, if we have a choice - I choose us, the homeowners and not the Fat Cat execs who pulled more money out of these 'troubled' banks during the bubble than should be legal, and they left their own companies in the ditch.
How about we not bail out anyone, and we force the banks and the borrowers to be stuck with each other:
http://yourmortgageoryourlife.wordpress.com/2008/11/19/a-foreclosure-solution-so-simple-it-would-work/
This plan would not solve every problem, but it would force borrowers and lenders to deal with their own mess, and not dump it on to taxpayers.
Posted by guest , Nov 24, 2008 11:45AM
John Thain will be clipping goat hooves before next year is over.
Posted by guest , Nov 24, 2008 11:47AM
Much to my chagrin, i was able to vote agains the BAC/MER deal as I put on a trade that was long BAC, short MER. Hopefully thousands of others followed me. Ken Lewis must be crapping his pants awaiting the results.
C is sick still. Still no common equity. No way to use DTAs (which represent almost 100% of tangible common equity) in the next ten years given the new cash burdens on the company. Still overly exposed to credit cards, student loans, auto loans, RV loans, boat loans, etc.
GS needs to post some serious collateral on the now infamous Buffet puts, understand many buyers are keen to realize on these assets now that they are worth 10x original purchase price.
Do we really think everything is OK now?
Posted by guest , Nov 24, 2008 11:52AM
@9 Why would GS need to post collateral on BRK's puts? I thought the puts were European style, so what can buyers "realize on their assets" now?
Posted by guest , Nov 24, 2008 11:54AM
#4: laugh all you want but if you call too soon you might scare off a nice baby who's ready to party
Posted by Seaman Bodine , Nov 24, 2008 11:57AM
like anybody is going to steal your kay car
Posted by guest , Nov 24, 2008 12:00PM
What are we at? 11% gain in the indexes in the last 4 market hours? Seriously, this is a sure sign of a healthy market.
Time to buy puts again, this sucker *might* rally until Black Friday results are known, then its back to ~PAIN~ city.
-Not Retail-
Posted by guest , Nov 24, 2008 12:02PM
@9
They want to sell them back now. Even if European they have increased dramatically in value. Anyone who buys will want some collateral.
I guess it is really a question of how they were sold (eg GS taking Berkshire credit risk and buyers taking GS risk).
Posted by guest , Nov 24, 2008 12:04PM
This deal is fine and it will probably close. BAC could have and should have gotten better terms but it will be a long-term positive for the company - provided the unload enough dead wood in Manhattan and bring the costs way down.
If the financial system survives (which looks increasingly likely after the events of yesterday/today), housing prices will eventually inflate and these banks will have massive "write-ups" on the books.
The real question is whether MW and Roubini, etc., will eventually acknowledge that - these assets are being priced at crazy low prices with the expectation of massive defaults.
Wall Street has probably changed forever. There will be some people who get paid big bonuses, but the premium will be paid for adding alpha, not just levering up mismarked assets.
Posted by Lowly Assistant , Nov 24, 2008 12:06PM
13,
Yeah, no place to go but up through Dec. 1.
Rolls eyes...
Posted by guest , Nov 24, 2008 12:14PM
Put buy time on GS.
Posted by Seaman Bodine , Nov 24, 2008 12:35PM
@15
w t f?
Posted by guest , Nov 24, 2008 12:39PM
"kick in the taco"
Instant classic. (golf clap)
Posted by guest , Nov 24, 2008 12:40PM
@18
seaman bodine you suck harder than a cyclone
Posted by guest , Nov 24, 2008 12:47PM
Whatever, #12 man. It's different out here. It's not like New York
Posted by Seaman Bodine , Nov 24, 2008 1:13PM
like house of pain was gonna do something
Posted by guest , Nov 24, 2008 1:17PM
Seaman bodine you are the biggest gaylord ever to have roamed this message board.
Posted by guest , Nov 24, 2008 1:23PM
@15 Wow you must of had a good weekend. What are you smoking???