Ken Lewis Is Chairman of the Nothing Is Fucked Club But We All Have Jackets

  • 15 May 2009 at 9:39 AM

Hey, Why Don’t We Muck With Their Board?

Picture 1331.pngOh dear. What’s next?
I have an idea, how about you just nationalize the damn thing and stop pretending so as to avoid offended relatives of Ken Lewis? Can we finally dispense with the fiction that these are viable, private companies?

Federal officials have pressured Bank of America Corp. to revamp its board by bringing in directors with more banking experience, as regulators place the bank under increasingly heavy government scrutiny.
The move represents unusual influence by the federal government over the workings of a financial institution in which it doesn’t own a stake. It’s particularly significant because many of the bank’s woes stem from its purchase of Merrill Lynch & Co. — an acquisition that was completed after heavy prodding by federal regulators. The Merrill deliberations were the beginning of regulators’ deepening involvement in the Charlotte, N.C., lender’s day-to-day operations.

BofA Urged by Regulators to Revamp Board of Directors
[The Wall Street Journal]

  • 06 May 2009 at 8:57 AM

I Said Nothing Is Boaed, Dude.

kenlewis.jpgWe find ourselves wishing there was a word in English for that feeling you get when you read an article confirming the details of a bit of news- probably bad- you were already expecting. It’s that sort of sinking “Uh… wow.” that represents the sudden realization that, though you were prepared for the news, it is now more “real.” What is that word? As you know from our “Bank of America needs $34 billion” announcement yesterday, there is now at least a temporary answer: “Boaed.”
Henceforth– Boaed (“bow-uh’d“): The forced realization of the shocking magnitude of an event or occurrence that, while expected or already making rounds on the rumor circuit, only reaches the pinnacle of its emotional impact once reported through mainstream channels or experienced first-hand.
The real question, however, is how will the market receive this “news.” Given that there is no better place to find the answers to these questions than our comment section, we leave it to you. BAC closed at $10.84. Where does this take us, dear readers? Where will BAC open? More importantly, where will BAC close? $15.00? $1.50?
9:45 am Update: BAC: $11.58 +$0.74 +6.83%

  • 28 Apr 2009 at 1:49 PM

Breaking: CalPERS Hates Boone’s

And, accordingly, has voted against all 18 of Bank of Amerrilwide’s Directors and Ken “Strawberry Hill” Lewis.
Suck it Kenny.
Update: Reuters has it now: CalPERS opposes entire Bank of America board

CalPERS said it opposes the directors “for their role in allowing billions of dollars in bonuses to be paid to Merrill Lynch employees and for their role in failing to disclose to shareholders the true financial condition of Merrill Lynch prior to the consummation of the merger.”

Granted, they only own one third of one percent, but still.

Sure, Cuomo may have given him an alibi, but the SEC is still pissed off, and plans to remain so for some time:

Cuomo revealed in a letter yesterday to Congress and federal regulators that Lewis testified in December that then- Treasury Secretary Henry Paulson may have threatened to remove the bank’s management and directors if the lender tried to back out of buying Merrill. Lewis said he was instructed by federal officials not to disclose Merrill’s losses, his desire to back out of the merger or the intervention of regulators, according to Cuomo.

If you needed a more direct example of why it is simply a bad idea in every single instance to permit government ownership of banking firms except for the limited purposes of facilitating liquidation, this is it.
Consider what can only be a devastating long-term message to markets: You can never again believe the disclosures from any firm in distress when the government is involved.
Bank of America’s Lewis May Face SEC Probe on Merrill [Bloomberg]

  • 02 Mar 2009 at 11:50 AM

Another “Killing It” Definition

We are fairly certain that none of our readers would be surprised to learn that private equity has been taking it on the chin in a big way in the last many quarters. What might be surprising is that the likes of KKR haven’t been hit harder. We sort of expected to see leveraged endeavors like big private equity to return far more craptastic results. Apparently not:

Kohlberg Kravis Roberts & Co. losses mounted as the private-equity giant took sharp write-downs across its portfolio in the fourth quarter of 2008.
KKR Private Equity Investors LP, the publicly traded fund created by the firm to invest in its deals, announced that the value of its holdings dropped 32% during a period in which the S&P 500 stock-market index dropped 23% and the financial crisis entered a more serious phase.

Perhaps not losing to the S&P 500 by more than 900 basis points in the last quarter is the new killing it?
KKR Private Equity Says Holdings Lost 32% [The Wall Street Journal]