A successor for Lewis has not yet been named, but the Board is diligently looking (so they say) and plan to find a suitable replacement in the near future. The announcement, done in very quick fashion and without much of a plan in place naturally comes with questions. The main question, according to Gasparino is whether Lewis is really retiring because the SEC is close to making a decision to sue Mr. Lewis, personally, for the ML deal and such. Considering it has been recently reported that Lewis was not planning to step down, the argument…or question…is definitely one that carries some weight and validity. To be fair…if the SEC were about to sue me personally (they wouldn’t get much, but still), I’d definitely be running for the hills and out of harm’s way.

Lewis Heads for the Hills

Personally, I think it is a pretty silly idea. Once the government begins dictating how and how much to pay our executives, we are no longer competitive in the marketplace. It is absurd to think that people who have near zero concept of a banker’s or trader’s responsibilities will be the ones determining how much their (banker/trader) contributions and employment are worth to the company. Sure, the banks that received billions in aid should not be paying out billions in bonuses, that’s a no-brainer. But to have a Representative weigh in on how much to pay a trader who brought $250 million into the firm in 1 year, after that Representative was just reprimanded by his constituency for a low minimum wage is foolish. How can that representative adequately evaluate that trader’s merit, where would he/she find the time, and why would he/she want to – that is the job of the company’s management and its shareholders – I’m off on a nasty rant and I’ll end it there. Sorry for the run at the keyboard, but hey, it doesn’t just affect them, or me, it could also affect you, or at least will at some point if you’re reading this site and interested in the business.

Cap It All!

According to the committee on all these Dow Jones, BofA could very easily be next on the chopping block, and is already in the line of fire. BofA should definitely tread softly and pay back the government funding (or at least show progress towards that goal) as quickly as possible if it wants to keep playing with the Dow’s big boys (and girls, because let’s not gender discriminate here).

GM and C Out – BofA Next?

At the end of the day, it is pretty unlikely that Congress will jump up and down in excitement at the idea, but, that said, the plan (and this is just one part of it) will not be brought o Congress until about mid June, so that gives the Obama team some time to tweak and revise as necessary. I mean it’s not the worst thing that they could come up with, but honestly, do we really think it is going to make a resounding difference in the way business is conducted, or will it end up being a larger version of the same agencies that are already out there. Perhaps the real upside is that if the market collapses again, and banks are again to blame, we will have one prominent agency there to accept the blame, because, I mean honestly, who really likes a game of he said, she said and finger pointing anyway – this will be much cleaner. Then again, I could be wrong, the agency could be approved by Congress and start sweeping up the garbage and put the neighborhood on watch – we’ll just wait and see what Obama actually brings to Congress in a few weeks.

One Guard, Many Banks

In short, giving up on the banks would cause an illiquid environment, and a lending freeze – in other words, allowing the banks to fend for themselves would cause lending practices to drastically tighten, which will result in many other industries and businesses, both unhealthy and healthy, that need fresh capital to survive, to, simply put, fail. Allowing the auto industries, however, to collapse (not entirely, but to an extent), will ideally force new entities to form, and a vast restructuring to occur, which will, ideally, allow the surviving and combined entities to be well equipped to take on the next stage of the game in far healthier and better balanced capacity. I am, of course, giving a mile-high overview of the article, but, hopefully, it was enough to whet your appetite for the full length piece. So, take a few minutes and give it a read.

Save the Banks (and the Bankers)

I was shocked when I read it too, and while it could all just be for show, as it stands right now, BofA is claiming that they will be ready, willing and able to pay the TARP funds back, in their entirety, by year end. While this is not as fast as GS or JPM, come on, it’s BofA for goodness sake – I was expecting those TARP funds to stay out through at least 2012. Time will tell whether there is any validity to the claims, and any truth to the words. As it stands right now, however, it would appear that BofA fully intends to be government free by the end of the year.

Bank of America has the $

BofA takes another step up the $33.5 billion staircase

Pay Caps…Be Gone!

Does a lot of what she says make sense; sure. Is she right; possibly. Has she been saying the exact same thing for a long time now and repeating herself about once every few weeks, at least, to stay current in the news; absolutely. I mean let’s be honest; there really isn’t any groundbreaking information here, just more of the same to keep the Whitney name alive. Will everything she says ring true in the future; only time will tell.

Whitney says No to Banks…Again

Honestly, I can’t put it past the guys – I mean no one wanted another bank failure and let’s be honest, Bernanke, Paulson, etc really didn’t know how to handle the sudden onslaught of distress and panic – no one did (or possibly does, but here’s hoping). Then again, a few weeks ago Lewis was blaming John Thain for withholding figures, and using some dirty tactics – maybe Lewis is just grabbing at the next straw to save his butt; he has to try to save his job somehow, and what better way than with a new scapegoat.

Bernanke and other sources are denying any conversations of the sort, claiming that Lewis was never bullied into keeping quiet, nor was his or the Board’s positions threatened in any way if they stopped (or intended to stop) the deal.

Next, Paulson has come out and stated that he did in fact threaten Ken Lewis and the Bank of America Board, not necessarily because he wanted to – it was at the request of Bernanke – then he changed his mind and said that it was all his idea – convenient. This little nugget obviously contradicts Bernanke’s statement in which he claimed that no one ever threatened Lewis’ job over the Merrill deal – although at least Big Ben didn’t make the call.

At the end of the day, it’s just another fascinating, confidence building, Wall St. tale. It is interesting, however, to see just how deceitful the people we thought were there prevent fraud will actually become in order to achieve their goals – lying is lying, whether it’s a CEO or a Fed Chairman, and frankly, it’s inexcusable. If we can’t count on our regulators, then we’ve got much bigger problems than whether Merrill Lynch would have gone under. Just my $0.02 – drop some comments with your opinions, theories and emotions – they are always appreciated.

Lewis’ Testimony

Bernanke Response

Paulson Flip Flops