On “The Daily Show” last night, John Oliver reported on what has to be one of the most interesting stories to come out of the financial crisis. I don’t want to ruin too much for you, but it involves a big bank, foreclosure and repo men. I think you will be surprised how this one turns out. (more…)
Transparency is one of the basic tenets of capital markets. Publicly-traded companies have a legal obligation to disclose material facts about the value of their company. Unless the Federal Reserve and Treasury Department muzzle them, that is. The Wall Street Journal reported today that Bank of America chief executive Ken Lewis was prompted by Federal Reserve Chairman Ben Bernanke and then-Treasury Secretary Henry Paulson not to discuss the financial woes of Merrill Lynch as Bank of America negotiated its government-backed purchase of Merrill. (more…)
CNBC reported that big spender, wannabe interior designer and former CEO of Merrill Lynch John Thain will reimburse Bank of America for his $1.2 million office renovation, paid for with company money. In a memo to Merrill employees, Thain also defended reports of accelerated bonus payments before the closing of Merrill’s sale to Bank of America.
“Our 2008 discretionary bonus pool was 41% lower than 2007. The size of the pool, its composition 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,” he said.
Want more proof of some Wall Street titans’ greed and lack of responsibility during the financial meltdown? Check out this story detailing the decorating habits of former Merrill Lynch CEO John Thain, who resigned from Bank of America today. Merrill Lynch agreed to be sold to Bank of America at the end of last year in the wake of the financial sector crisis.
The Daily Beast reported that Thain spent a total of $1.22 million in company money to trick out his office with, among other things, an $87,000 area rug and a $35,000 “commode on legs.” (more…)
Spurred by the Lehman Brothers Chapter 11 bankruptcy, Merrill Lynch’s acquisition by Bank of America and AIG’s (American International Group Inc.) 60.79% decline, the Dow Jones Industrial Average today closed down 504.42 points, dropping to 10,917.51 from 11,416.37.
The S&P 500 dropped 59.01 points, closing at 1,192.69. That’s the biggest single day drop since Sept. 11, 2001.
According to Lehman, none of the company’s broker-dealer subsidiaries or other subsidiaries of LBHI was included in the Chapter 11 filing and all of the U.S. registered broker-dealers will continue to operate. Neuberger Berman, LLC will continue to conduct business as usual.
Lehman’s bankruptcy will reportedly result in the loss of 25,000 jobs, and the liquidation of the company, as negotiations with foreign wealth funds failed when the Federal guarantees failed to materialize. Such guarantees were made for Bear Stearns, when JP Morgan acquired it in March.
In the shadow of events, the Federal Reserve Bank has created the new Term Securities Lending Facility (TSLF), which could provide support and liquidity to the stressed markets. The Federal Open Market Committee announcement is scheduled for Tuesday, as is the Treasury International Capital (TICS) data, which will announce the amount of foreign capital entering or exiting U.S. markets.
Tuesday should be another intersting day.
