The Final Days of Merrill Lynch

The Atlantic ^ | September 2009 | William D. Cohan

[BGHater]

Last September, as Wall Street turned to rubble and panic threatened to come unleashed, Ken Lewis, the CEO of Bank of America, agreed to swallow one of the country’s most toxic investment houses. The deal was not altogether voluntary; as details have slowly emerged, the coercive role of the Fed and Treasury has loomed larger. What exactly happened in the weeks leading up to the merger? Did the deal save us all from economic apocalypse? And what does the government’s unprecedented role in it portend for the future of our economy?

It’s been almost a year since Bank of America agreed to buy Merrill Lynch, on September 15, for $50 billion in stock, in what now looks like one of the most fraught deals in the history of American business. The deal was announced on the same day that Lehman Brothers filed for bankruptcy protection and the day before Treasury and the Federal Reserve decided to throw an $85 billion lifeline to AIG, the global insurer that had foolishly underwritten the risks of the financial system. Although the end of Wall Street was imminent, Bank of America’s offer valued Merrill Lynch at $29 per share—a 70 percent premium over the stock’s closing price on the previous Friday, and nearly twice its book value.

Bank of America’s generosity allowed Merrill to dodge a bullet, as it was just days away from following Lehman into bankruptcy court. Merrill’s CEO, John Thain, had spent much of the previous weekend at the New York Federal Reserve Bank’s Italianate palazzo in downtown Manhattan, in strained discussions about the financial industry’s mounting distress, and he knew his firm’s future was imperiled.

[Frantzie]

Stan O’Neil the ex CEO who pushed them into mortgages should be in jail and sued by the shareholders. He destroyed ML.

[DocRock]

bookmark

[preacher]

August 18, 2007 - Peter Schiff Versus Ben Stein - Merrill Lynch was so cheap, they should have put them in Cereal boxes.

http://www.youtube.com/watch?v=RYX1AgEV0vo

Comment at 7:05