Update: Bernanke gets Grilled on the Hill…
Update: Ben doing very very well in his testimony, Markets are ecstatic about it, Dow up 148…
Fed Chairman Bernanke under subpoena before Issa and Towns’ House Oversight and Government Reform Panel on BofA/Merrill merger
CNBC Live Stream Here
Ben’s prepared statement:
…Bernanke, in prepared testimony to a House committee investigating the matter, said he did not threaten action against Bank of America’s CEO Kenneth Lewis or the bank’s board members if they decided to abandon the takeover.
“Neither I nor any member of the Federal Reserve ever directed, instructed or advised Bank of America to withhold from public disclosure any information relating to Merrill Lynch, including its losses, compensation packages or bonuses or any other related matter,” the Fed chief said.It marked Bernanke’s first public comments since the House committee launched an investigation earlier this year into whether he or other government officials bullied Bank of America to stick with its plan to combine the two financial powers after Lewis found out about Merrill’s financial woes….
FD-MiM are shareholders…a list of our previous posts here
Fair Lending, Mortgage Modifications, Bank Regulation…
I knew Maxine Waters D-CA wouldn’t let me down
Barney Frank D MS, asks them not to foreclose on anyone while we are in the last few weeks before the new mortgage modification plan comes from Geithner
and MiM fave Carolyn Maloney D NY tries to get down to brass tacks on the BofA Merrill Bonus fiasco:
The Empire Strikes Back!!!…Thain says Lewis knew all….
Update: 11:48am EST: And they’re off!!!! BofA releases a stmt claiming Thain and Merrill Comp Cmte made call on y/e bonuses., reported live on CNBC…this after the FT report yesterday that BofA had input into those bonuses..
a real pixxing match going on here folks..BofA claiming they had no legal right to challenge the bonus decisions? I say Ken Lewis is on his way out….(PS Charlie Gasparino is once again displaying his lack of uhmm couth on CNBC interrupting everyone to say he knows all..again…Kudlow says something important here, LEWIS BOUGHT COUNTRYWIDE yeah remember that???) To MiM, it looks like BofA is rebuilding in the image of CITI (which failed-hey maybe that’s their plan to be too big to fail…)..
Oh it is getting good now. If I weren’t a frakin shareholder I might even enjoy the drama of it all…
John Thain, erstwhile CEO of Merrill and former CEO of NYX and COO at Golden Slacks, has struck back at one-sided reports leaked by Ken Lewis over at BofA suggesting Thain pulled the wool over his eyes pre merger..
This is not only high drama it is a metaphor for the shift in our economy…a head to head matchup b/w commercial banking heavyweight Ken Lewis and the welterweight of Wall St, John Thain..and don’t evah forget Thain is a Golden Slacks alumnae, that makes him Golden donchaknow…in Vegas odds I give it to Thain…
had this been Jamie Dimon going up against Thain, then I would have said hands down Dimon wins it….but Lewis doesn’t have that certain ‘je ne sais quoi’ of Jamie…Lewis is still on his way OUT as CEO..believe it…
The media has attempted to cast Thain in the role of poster boy for Wall St malfeasance, and that expense report on his office didn’t help, even Obama mentioned it for cripes sake..yeah methinks Thain is pixxed and not going down alone..
KEN LEWIS COME ON DOWN!!!
CNBC Maria Bartiromo got an exclusive interview with Thain, we will post linkys as available, Thain also wrote a memo, the ultimate tool in CEO Jousting..the MEMO!!
He said he had been “completely transparent” with Bank of America and pointed out that the acting chief financial officer of his businesses had been Bank of America’s chief accounting officer.
“They learned about these losses when we did,” he wrote. “The acting CFO of my businesses was Bank of America’s former Chief Accounting Officer. They had daily access to our (profit and losses), our positions and our marks. Our year end balance sheet target (which we more than met) was given to us by Bank of America’s CFO.”
Read The Memo here:
To my Merrill Lynch colleagues:
It has been an honor to lead this company over the last very difficult year. The decisions that I made were always with the best interests of our shareholders and employees above all. I believe that the decision to sell to Bank of America was the right one for our company and our clients. While the execution has been difficult, I still believe in the strategic rationale of the transaction and I wish you all the best for the future of the combined companies.
I want to address several topics that have been inaccurately reported in the press. The first issue is our year end bonus payments. Our 2008 discretionary bonus pool was 41% lower than 2007. The size of the pool, its composition (cash and stock mix), and the timing of the payments for both the cash and stock were all determined together with Bank of America and approved by our Management Development and Compensation Committee and our Board. The total bonus pool was also substantially less than the amount allowed under our merger agreement.
-snip-
The final topic is the expenses related to my office. The $1.2 million reported in the press was for the renovation of my office, two conference rooms and a reception area. The expenses were incurred over a year ago in a very different environment. Nonetheless, they were a mistake in the light of the world we live in today. I will therefore reimburse the company for all of the costs incurred.
I thank all of you for your hard work and your support over the past year. I wish you all success in the future.
John
Can anyone accurately guess the price of that parchment trashcan?? If you said $1,200.00 you win!!!
Hey I’m a shareholder don’t I even get any TURTLE WAX???
Breaking: Lewis throws Thain overboard…Thain ‘resigns by mutual agreement’ from Merrill/BoA…
…But can Ken Lewis survive the kerfuffle?? Full Disclosure, I am a Merrill, now BofA shareholder. So Thain helped Merrill survive in one sense and did his full fiduciary duty to Merrill *perhaps* by keeping it alive through the BofA merger…but did Ken Lewis do his FD by BofA shareholders? And what about due diligence on the deal in mid December when the losses started mounting?
In this Sept. 15, 2008 file photo, Merrill Lynch Chairman and CEO John Thain, left, smiles as Bank of America Chairman and CEO Ken Lewis, speaks at a news conference in New York. Thain will remain with Bank of America after it completes its acquisition of his investment bank, and serve in a role similar to the job he's held at Merrill. He will oversee global corporate and investment banking and most of BofA's global wealth and investment management operations. (AP Craig Ruttle)
And no one will cover this, but I want to know, did BofA’s refusal to voluntarily modify mortgages under FDIC outline by Sheila Bair, ultimately cause it’s own continued losses and pain in the Merrill MBS losses? Cause if so, isn’t that ironic? ( if no less painful to me as a shareholder or homeowner, very Alanis Morrisette) !!! I betcha the answer to that is a great big YES. Harakiri by stupidity and refusal to help the little guy eh? IT’S THE HOUSING STOOPID!!!!
On another note, this Thain/Lewis melodrama is an ongoing conflict we will see repeated b/w commercial banking and Wall St corporate cultures….yep…notice how CITI never got past that in its ginormous amalgamation of diverse corporate cultures…(For those keeping track the BofA/Merrill group combined has 25 Billion in TARP funds at last count)
CNBC reports:
Thain’s resignation comes less than a week after Bank of America was forced to seek $20 billion in government bailout money to absorb Merrill, which it agreed to buy last September amid the credit crisis.
The extra government money was needed because of an unexpected $15.31 billion loss by Merrill in the fourth quarter. The government also agreed to share in losses on about $118 billion in Merrill debt.
The relationship between Lewis and Thain has been strained because of Merrill’s unexpectedly large loss.
Merrill, meanwhile, decided to move up its year-end bonuses, doling out cash just days before it was officially acquired by Bank of America, it was reported earlier Thursday.
Expect LOTS more on those bonuses Merrill paid out….
WOTS is that Ken went to Treasury mid-December to say the merger was in jeopardy when the Merrill losses kept mounting as the market continued downward….Lewis has indicated Treasury told him ‘do the deal we have your back’!
So, Ken apparently feels this is sufficient to cover HIS fiduciary duty to the BofA shareholders since he never told them/us about the pending Merrill losses prior to the BofA shareholder vote on the merger…
Someone… Ken clearly, has the long knives out for Thain, Charlie Gasparino is on CNBC Live releasing the details of the million dollar makeover Thain gave his exec suite at Merrill…I was burned by Thain as a New York Stock Exchange shareholder also, that tanked on his watch too…but how much is what was happening on the street at the time?
Will we BofA shareholders in the common stock live to see another year as a free company of capitalism? How much farther can our common share equity be diluted by capital injections by the government? Inquiring minds, and my mom’s pension fund, want to know!!!
More as it continues to develop….
ginaswo
