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Lewis Silenced, Threatened Over Merrill By Bernanke And Paulson

April 23, 2009 RSS Feed Print

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Bank of America's Ken Lewis' testimony sheds some light on the gory details of last year's crisis management. From the WSJ (sub. req.):

Mr. Lewis, testifying under oath before New York's attorney general in February, told prosecutors that he believed Messrs. Paulson and Bernanke were instructing him to keep silent about deepening financial difficulties at Merrill, the struggling brokerage giant. As part of his testimony, a transcript of which was reviewed by The Wall Street Journal, Mr. Lewis said the government wanted him to keep quiet while the two sides negotiated government funding to help BofA absorb Merrill and its huge losses.

The cost of refusing to keep shareholders in the dark might have been his job:

The Wall Street Journal previously reported, in a page-one story on Feb. 5, that Mr. Lewis agreed to proceed with the Merrill merger only after Messrs. Paulson and Bernanke said that he and his board would lose their jobs if Bank of America backed out of the deal. Mr. Lewis's testimony with the New York attorney general's office corroborates that account.

At a time when Bernanke, the Fed and Paulson' replacement at Treasury Tim Geithner are facing charges of weakness and inefficiency its interesting to get the details on their willingness to strong-arm major financial sector players during the crisis.

Update: Bernanke denies any threats to Lewis.

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Sparky’s Latest Take on Things:
If you pause and look around, you’ll note that “most” of the evil, greed-driven, over-leveraged, and pathetically mismanaged firms that were squarely behind the huge aggregate naked short positions in CMKM Diamonds and a bunch of other firms still sport balance sheets cluttered with a slew of mortgage-backed crap; garbage that is tied directly and irreversibly to residential and commercial real estate which, barring a huge settlement of sorts, will continue to lose value with each passing day.
For this reason alone, there is absolutely no exit possible for any of these scum-sucking, bottom-dwelling leach-like entities. And Sparky used the word “most” because some – Lehman Bros, Bear Stearns, Merrill Lynch, and Wachovia, to name a few – have already been cannibalized; while others – like Bank of America, Citigroup, and Morgan Stanley - have already seen their sacred shares swiftly reduced to single-digit-midget status.
And, truth be known, the abandonment of long-established mark-to-market statutes late in the first quarter of 2009, back when the Dow Jones Industrial Average had rightfully slid from over 14,000 all the way down to 6300, is the only reason the dirtbags running these firms haven't already been indicted, convicted, and imprisoned.
By wimping out and caving in to pressure and fear-creating tactics orchestrated by politicians and regulators, the Financial Accounting Standards Board carelessly discarding the accounting profession’s long-held and cherished doctrine of full disclosure. But by doing so, the FASB did not “technically” free these thugs from their obligations, as that clearly remains a mathematical impossibility; but sadly, the corrupted bureaucracy did grant the undeserving crooks a brief reprieve.

Sparky of MA 6:57AM July 06, 2010

By wimping out and caving in to pressure and fear-creating tactics orchestrated by politicians and regulators, the Financial Accounting Standards Board carelessly discarding the accounting profession’s long-held and cherished doctrine of full disclosure. But by doing so, the FASB did not “technically” free these thugs from their obligations, as that clearly remains a mathematical impossibility; but sadly, the corrupted bureaucracy did grant the undeserving crooks a brief reprieve.
In the 16 months since then, the Dow has rebounded over 50% from its March 2009 low, but all the popular indexes still remain over 30% below their 2007 all-time highs.
And in the interim, a slew of huge naked short positions, non-performing loans, and way-under-collateralized mortgages deep in default were neatly packaged up into creative derivative products; fancy investment vehicles that simple-minded congressional members find far too complicated to even understand, let alone regulate in any way, shape, or form.
But, one indisputable fact still remains, there simply is no escape.
And in this modern day and age, each and every one of these thieves left behind plenty of digital slime trails; indelible audit tracks that will surely snare the guilty, but only after mammoth failures happen, and only after the resulting investigations begin to unearth all the underlying filth.
Fortunately for those holding shares of CMKX and other naked shorted companies, the only way for global leaders to lesson the impact of what lies unavoidably ahead – which is not only in the best interests of their constituents, but also the only way most will avoid being dethroned in disgrace – is to try and re-inflate the many asset bubbles that central banks around the world so carelessly allowed to form between 2001 and 2007.
And the only possible way to do that is to literally inject many more trillions into the planet’s many monetary systems, while simultaneously, for the sake of re-building much-needed confidence, making it at least appear as if global investment markets are being cleaned up.
In a nutshell, that is precisely why the shareholders of CMKM Diamonds, and many other companies whose shares were naked shorted into the ground, should rest comfortably assured that a sizable settlement is inevitable. And considering that the trillions in stimulation administered to date around the world have yet to accomplish zilch in the way of improving unemployment and reversing the ongoing and steepening slide in real estate values, Sparky is of the opinion that settlements are sure to be disbursed sooner rather than later.
And hey; it everything stated above isn’t right on target, why then after almost five years would all these obviously-compensated bashers still be here 24/7? Oh sure, they’re all just Good Samaritans; right?
Sincerely,
Sparky

Sparky of MA 6:56AM July 06, 2010

So is his son, Anthony DeMint. They do hundreds of scam deals with public companies, research rubicon financial a demint company and all the trouble with the sec

alpons of GA 11:53AM May 05, 2010