The stock of presumably-insolvent Bank of America (BAC) continues its collapse, closing below $5 for the first time in 18 years. Miraculously, the firm’s CEO, Ken Lewis, who destroyed the firm by buying Countrywide and Merrill Lynch, is not only still employed, but still appears to be supported by the board.
The Obama Administration seems allergic to the word “nationalize,” so in the hope that we can persuade them to finally do what needs to be done but call it something else, we’re going to switch to the euphemism proposed by Calculated Risk…”preprivatize!”
Mr. Geithner, it’s time to preprivatize Bank of America. Specifically:
- Seize it
- Write down the value of the assets to nuclear winter levels
- Convert enough debt to equity to strongly recapitalize
- Refloat or sell off the parts
And please do fire Ken Lewis while you’re at it. Every day he remains at the helm is yet another day that Americans will chafe at the fact that accountability for disastrous jop performance stops at the door to the CEO suite.*
See Also: Ken Lewis Should Be Fired
* No, we’re not letting Ken off the hook because Bernanke and Paulson said they didn’t want him to abandon the merger after Merrill’s horrific losses in October and November. He made the decision to go ahead…and now Bank of America’s stock is below $5. A CEO’s job is to look out for shareholders, not to “take one for the country” or however it is that Ken Lewis likes to explain this decision to himself. And the decision we want Ken held accountable for is the one to buy Merrill in the first place.