Here’s some reading material for you in advance of tomorrow’s big hearings on the hill concering the Fed’s and Treasury’s role in the Bank of America (BAC)/Merrill Lynch merger.
Via Zero Hedge, these are at least some of the emails that were shot back and forth, as officials debated what kind of pressure they could bring to bear on Ken Lewis, to ensure he wouldn’t invoke the MAC and wiggle out of the Merrill deal.
Update: Having now read through the emails, we’re not seeing the smoking gun that the Fed was involved in a “cover up” as Congressman Darrell Issa has alleged. Sure, everyone wanted Ken Lewis to go through the deal, but if this is all they got (and there may actually be more, so who knows, exactly) then you don’t get all that far. The old line about how “if you’re going to bring a gun on stage, it better go off” comes to mind.
An interesting note comes on page 5, in regards to Ken Lewis’ desire for some kind of “Doctor’s Letter” exonerating him in the event of a future shareholder lawsuit over non-disclosure. As Fed General counsel Scott Alvareaz puts it: It’s Lewis’ job to make tough decisions. That’s what he gets paid the big bucks for. Man up, man!
On page 9, there’s talk about eliminating management, but only in the event that Ken Lewis tried to invoke a MAC, failed and then demanded a back stop — essentially having his cake and eating it too, at the taxpayer’s expense. Such an action, particularly given the dubiousness of the MAC, legitimately sounds like a firable offence.
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