Shareholders will vote the (overpriced) deal for Merrill. They should ... just say "no".
Justin Fox explains:
The reason we are not in investment banking business in a large way is that it's culturally incompatible with the traditional banking business.
Felix Salmon piles on:
Investment banks have a natural tendency to expand until they use all of the balance sheet they're given. ... they're constitutionally incapable of constraining themselves. And when they merge with -- even when they're taken over by -- commercial banks, they invariably end up taking over the host organism and seeding their high-tech products all over its balance sheet.
CEO Lewis? Well, he's on the Sports Illustrated cover, and you know what that means:
"It is incumbent on all of us to help our industry find a new balance between the desire for economic growth and the need for market stability," Lewis said at a dinner in New York after receiving American Banker's Banker of the Year Award.
BOA shareholders will rue the day. $5 Billion in write-downs expected in their opening quarter together, and the Merrill Board also approved an unchanged dividend. Red is the color for this wedding, in every sense of the word.
$875 Billion in deposits at risk. Taxpayer guarantees now going to support ...
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