The answer is "e." He is galactically stupid.
Ken Lewis is the CEO of Bank of America. In September, Merrill Lynch CEO John Thain watched as Lehman Brothers went bankrupt. That is, its common stock was completely worthless because of overwhelming debt obligations on its balance sheet--primarily due to the "toxic" mortgage-backed securities and related derivatives we've all been reading so much about. Thain thought, "Wow, our risk management is just as bad as Lehman's, if not worse, and we're also up to our eyeballs in CDOs. The government will probably opt not to bail us out either. I better find some sucker to buy our steaming shit sandwich or we're going to go bankrupt too."
So, Thain called Lewis and, over the course of a few hours, got him to agree to buy Merrill Lynch for $50B. The deal was announced that Monday and closed January 1. So Merrill's closest peer in the broker-dealer business was worth nothing, but Lewis spends $50B--WITHOUT DOING ANY DUE DILIGENCE. Who does that?
Surprise! Merrill posted a "worse-than-expected" $15.3B loss in Q4. Even though he had a chance to walk away from the deal before it closed on January 1, he declined. Sure, the government eventually pumped in (a probably-insufficient) $20B from the TARP, but the damage to BofA's stock price was done. It's down 83% since doing the Merrill deal in September.
This is who we're bailing out. He fired Thain yesterday. If Lewis himself isn't ousted next week, Obama should be held to account until it happens. This is long past absurd.
Anybody want to join me in starting a bank? There's really very little risk. Even if you're a total douchebag.
Sunday Night Futures
10 hours ago