Greed Leads to Poor Decisions

What are we to believe? What a web we weave when we try to deceive, or something like that.
The culprits this time are Paulson, Bernanke, Lewis (BAC), and Thain (ML). In October this group met and together decided, with arm twisting, that Merrill had to be saved from bankruptcy or the financial system could fail. Bank of America saved the day at the request of the Fed and Treasury and agreed to buy Merrill Lynch.
Since there was limited time for due diligence Paulson assured Lewis that TARP money would be available if there were surprises to be realized. Greed again ruled the day and Lewis said yes at a price unrealistically high given the condition of Merrill at the time.
Let's break this down to determine who in this group did the best job and worse job for their constituents'.
Bernanky represents the banking system. Paulson represents the U.S. Taxpayer through the distribution of TARP funds. Lewis represents the stockholders of Bank of America. Thain represents the stockholders of Merrill Lynch.
The banking system was saved so Bernanky did his job.
The U.S. taxpayer gave $20 billion cash plus $400 billion in guarantees to Bank of America when he could have just paid less had he done that for Merrill in the first place. Let's give him a D+ since there is an 8% return on $20 billion.
Thain saved his company and shareholders from bankruptcy at a price that turns out to be a premium to his shareholders since they got a price per share at many times the worth. They reported a loss of $15 billion for the forth quarter alone. Thain hasn't been with the firm that long and did not take the risks that got them into trouble. Give this man an A+.
Now we come to Lewis. He was taken by all the others at the expense of his stockholders. He has been there through all the risk taking, and the merger with Countrywide, the poster child for sub-prime. Can anybody tell me what this guy was thinking? What a numb skull. Give this nut an F-.
If I worked for Bank of America or Merrill Lynch and could work somewhere else or start my own business I would. Save your reputation and leave before your future is destroyed by this inept leader. I've seen this happen at other places and I believe it will happen here. Remember Enron.

A New Year Of Change

Happy New Year!!! Things are getting back to normal here. Holidays are over, our Grandson has returned to Fl, and school has started back.
The new year is a man made mark of time, along a never ending steady stream, which has as a reality only a split second of time. The rest is either the past or the future. At any moment in that steady stream we can depart from our norm and set a different path for ourselves. But we choose the new year most often as a time to change through the many resolutions we make.
Normally, for me, the New Year means little, because of the fact that nothing is different. Time just keeps moving along that steady stream. This year, however, I look to 2009 for some real change. Needed change.
I can't remember a time when Politics, Wall Street, Main Street, and the world have been so inter-connected and inter-dependent. One man is the hope of most of us to lead us out of the deep quagmire we entered in 2008. Obama will start meeting that challenge Jan. 20th.
I for one will back his efforts with words of support and will give him the benefit of the doubt even when I might question some decisions. I think we all should get behind him and support him any way we can. Who would want his job? He worked hard for it and won it pulling away, against all odds. Let's hope he will lead us in the same way, solving many of our problems, against all odds.
Instead of marking time by a new year, I'm marking time from Jan 20th. expecting a real departure from the norm exemplified by 2008.