The Financial Times reminds us today that those last minute Merrill losses almost derailed the Bank of America deal, and wonders how deeply our favorite exec was involved.
Bank of America was directly involved in markdowns that contributed to Merrill Lynch’s $15.3bn loss in the last quarter of 2008, its final reporting period before the Wall Street bank was acquired by BofA, sources familiar with the matter say.
Mounting losses at Merrill during December almost derailed the acquisition. Ken Lewis, BofA’s chief executive, threatened to walk away from the deal unless the US government provided $20bn in extra capital. The deal closed on January 1 after federal officials pledged their support.
And on those shifty credit default swaps?
Mr Cotty also gave his blessing to a $1bn writedown of credit default swaps involving investment grade companies. The markdown of a position on the “high vol 4″ index transformed a gain of $100m into a loss of $900m, said a source familiar with the matter.
Ouch.
BofA linked to Merrill writedowns [The Financial Times]
Is there a tax advantage for BofA to show large losses at Merrill?
@ 1
not tax, but TARP advantage
Tax advantage as well. Didnt ML transfer all their losses to their Dublin/London subsid.? Now they dont have to pay taxes for next 20 years or so.
What does it matter, ML is dead and gone. A proud 94 year old firm gone in a flash. Thanks Stan, you cocksucker – may a bolt of lightning find you alone on the golf course.
Attention Merrill Lynch employees (not associates). Run for your lives!!! The BofA ax is swinging and it won’t stop until all top performers are gone, leaving Ken Lewis and his band of redneck goober cockroaches to destroy Wall Street.
BAC just let go of ML’s compliance department last week, all ML people, not one BAC associate. See the pattern? The former head of the group snagged a cushy job at BAC and left the ML team out to dry. Couldn’t give a shit about anyone else….You know who you are. In six months you’ll be hung out to dry.
For those of you holding BAC ID badges, have you no shame? What a piece of crap firm.