Smearing Risk Around Like Peanut Butter
My kids have a trick that I am sure is not unique to our household. Faced with some type of food they do not like, they have become quite creative and artistic in spreading the mass of food around their plate, in a (generally) vain attempt to fool mom and dad that some of the food has disappeared.
After reading the scathing WSJ article this morning on the BofA / Merril Lynch deal, one has to wonder whether the feds were attempting the same trick with risk.
Like Welch, I welcome the WSJ as late arrivers to the bailout-skeptics party.
Dr. T:
When the B of A buyout of Merrill-Lynch was proposed, many of the B of A executives liked it. They were getting M-L for what seemed to be about 20% of its fair market value. But, they didn't have full information. M-L was in far worse shape than anyone at B of A imagined. Now the B of A execs and shareholders feel like they are treading water with the feds tying them to an anchor instead of a leaky boat.
For those who don't know, Mr. Lewis resigned (under pressure) his position as B of A CEO. He put too much trust in "Chicken Little" Paulson and badly damaged the bank. The two B of A vice presidents I know are bitter. One jumped ship to another bank, and the other hangs on while hoping that a general economic recovery will allow B of A and M-L to recover. I don't think that will happen, because the Obama administration bad-mouths B of A at every opportunity. I think they want B of A to fail because they can blame it on Paulson and the Bush administration. Plus, having a major commercial bank fail will make it easier for Obama to either nationalize the commercial banks (socialism) or subject them to strict federal oversight (fascism). I'm voting for fascism, but it's a close call.
April 27, 2009, 5:58 pmMatt:
The tactic your kids are using is not unique. I used to do that a lot with my mom's tuna casserole. I couldn't stomach it, and I can't stomach the subprime mortgage casserole either.
April 28, 2009, 1:45 pm