Happy Anniversary, Meltdown!

Direct from Boston's NECN. Text here.

This A.M.: Banks Shed Toxic Assets, Fend Off Gov't; Cuomo's Riding High; Business World Rolls Out Red Carpet for Qaddafi

Bank of America to Pay for Merrill Backstop, Faces SEC Trial (Bloomberg)

Ken Lewis trying hard to buy his way out of trouble, saying BofA will pay $425 million to cancel one piece of unused federal guarantee of Merrill Lynch's assets. Lewis frantically trying to reduce "reliance on government support and return to normal market funding." Will it help fend off the government? SEC says it will "vigorously pursue" its bonuses case against the bank, and maybe the SEC means business now that federal judge Jed Rakoff is on the agency's back.


Liquidation of CDOs aids banks (FT)

Market has loosened up for the assets underlying the complex, toxic securities that crashed Wall Street. An estimated $123 billion of these bullshit, defaulted securities that fed the Street's excessive greed have been liquidated.


Is This a Sucker's Rally? (Seeking Alpha, Jeff Miller)

A good roundup of bloviations good and bad.


Why haven't any Wall Street tycoons been sent to the slammer? (McClatchy, Kevin G. Hall)

In search of a "poster child for the Great Recession." Hank Paulson's always a candidate.


Envoy seeks to ditch 'bullying' US image (FT)

Louis Susman, Obama fundraiser and now U.S. ambassador to the U.K., announces that the Bush Era is officially over: "We are not a dumb power, we are not a bullying power." He adds: "To compare it to the previous relationship, well, some people might say that relationship wasn't healthy. Many people here in the UK didn't think it was healthy because it was without questioning and interaction."

MORE HEADLINES FOLLOW

Ken Lewis to Wall Street: 'Fuck you!' Wall Street to America: 'Fuck you too!'

frontline-ken-lewis-486.jpg
Frontline's "Breaking the Bank": A scary story about Bank of America, Hank Paulson, and the Merrill Lynch mob

Nice job last night by Frontline on the details of Ken Lewis's Bank of America and its government-enforced takeover of Merrill Lynch. "Breaking the Bank" is too soft on Lewis and makes too big a deal of its supposed coup in getting Lewis and Merrill's John Thain to talk, but still a good freeze frame on Wall Street's meltdown. (More on the specifics of the Frontline piece later.)

It's good that Simon Johnson gets more face time. The former IMF chief economist who types away (with James Kwak) at Baseline Scenario always serves up strong words (in a calm voice) about America's oligarchs — and provides good insights about erstwhile or wannabe oligarchs like Lewis and Merrill's John Thain.

Johnson starred in a memorable episode of the Bill Moyers Journal last February that even trumped Frontline's previous "Inside the Meltdown" piece the week before. (The Moyers episode is still better than the new Frontline piece.)

Nevertheless, give Frontline credit for a focused look at one part of the meltdown: the Merrill Lynch/Bank of America saga. And Johnson does a star turn for Frontline's new piece.

For a broader view of the meltdown, return to James Lieber's "What Cooked the World's Economy?" in the January 28 Voice.

And for more analysis of Johnson's analyses, go here and here.

Lewis/Thain death match: Merrill, BofA bankers at each other's throats

ken-lewis-working400.jpg
CEO Ken Lewis modeling the latest in torture stocks, in advance of Wednesday's BofA stockholders' annual meeting.
What promises to be this week's most exciting episode in the Wall Street meltdown won't even take place on Wall Street.

The venue is comparatively sleepy Charlotte, North Carolina, the site Wednesday of Bank of America's annual meeting of stockholders.

At which time, pissed-off shareholders will attempt to put CEO Ken Lewis in stocks at the public square.

He's already squealed like a you-know-what when he tried last week to blame Hank Paulson and Ben Bernanke for telling him to keep quiet about Merrill Lynch's disastrous performance last year when BofA swallowed up Merrill.

Now Lewis is in a pissing match with Merrill's former CEO, John Thain. This morning in the Wall Street Journal, Thain blasts back at Lewis:

Charlotte, N.C.-based Bank of America has stated publicly that the decision to pay bonuses to Merrill employees in December rather than in January, when they usually go out, was solely Mr. Thain's. News of the $3.62 billion in bonuses sparked a public outcry, badly damaging Mr. Thain's reputation.

But Mr. Thain says that he and Bank of America Chief Executive Kenneth Lewis agreed in writing that the bonuses could be paid before Bank of America's acquisition of Merrill closed, which led to the early payments. "The suggestion Bank of America was not heavily involved in this process, and that I alone made these decisions, is simply not true," he says.

Just another reason for shareholders to try to oust Lewis on Wednesday. His quick exit is all but assured anyway, but the only question is how quick — and how strong the shareholders' sudden muscles are.