Opinion

Felix Salmon

Too Big To Fail datapoint of the day

By Felix Salmon
April 2, 2009

Ken Lewis was interviewed, in Texas, on CNBC this morning, and Becky Quick started off with a softball:

Quick: This is an area where you have a major market share, just like you do in the rest of the country. I heard recently you say that one out of every two Americans has a banking relationship with you?

Lewis: Every other American family banks with us, yes.

Lewis was grinning from ear to ear when he said this — as though it wasn’t a highly embarrassing admission that his bank is far too big to fail and therefore poses an enormous systemic risk. If you needed any evidence that Ken Lewis still doesn’t Get It, you don’t any more: he’s still of the mindset that bigger is better. Hell, he probably still thinks that buying Merrill Lynch was a Really Good Idea.

I don’t know what the best way might be of cutting BofA down to a manageable and less-dangerous size. But I do know that with Lewis in charge, the chances of that happening are exactly zero.

Comments
6 comments so far | RSS Comments RSS

I had that interview on this morning. I wasn’t paying attention completely, but I believe Mr. Lewis said he thought Merrill and Countrywide were good purchases. I think he justified 2006 earnings (as if the dynamics are the same) and the “long-run”. If he indeed said this (I could have misinterpreted due to lack of attention) then you can remove “probably” from your assessment of Mr. Lewis.

 

Are you the “Felix Salmon” who wrote this:
http://seekingalpha.com/article/45577-ke n-lewis-savvy-countrywide-investment

just askin’

 

Yeah, I was pretty spectacularly wrong on that one, eh?

Posted by Felix Salmon | Report as abusive
 

“and then– and then the interrelationship between– you know, what’s good for America’s also good for Bank of America. ‘Cause we’re so intertwined that it just made sense.”

http://www.businessinsider.com/ken-lewis -is-insane-video-2009-2#comment-49a6c430 796c7a6f00ce4963

That’s my favorite quote from him.

 

….And you’re getting this one wrong again… In the long run Merrill makes a lot of sense for Bank of America. Ken did pay a high price for the acquisition but he’s simply making a bet that America will have at least a semi-average future in which case mortgages will bounce back and people will need brokers to buy financial products again…

Posted by Bingo | Report as abusive
 

I would not say wrong, I would say that if BofA is to big to fail it took more than Ken Lewis, the regulators were decidedly cooperative . Same goes for JPM, how did they get Bear Stearns or WaMu?

 

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