Oh what a mess!!!!

WSJ: BofA CEO Lewis testifies to NY AG that Bernanke, Paulson wanted Merrill losses kept quiet
http://finance.yahoo.com/news/WSJ-BofA-CEO-says-was-told-to-apf
-15006709.html?sec=topStories&pos=3&asset=&ccode=

A few comments from LeMetropole provide good insight into this amazing story....

Blackmail?

To all, so today we hear that Ken Lewis, CEO of Bank of America was told by Ben Bernanke and Hank Paulson to shut up about the "material adverse change" that took place at Merrill Lynch before their merger. I would call this "blackmail", but then again, who am I anyway, I think Gold is money so I must be a whacko. Mr. Lewis has testified under oath (whatever that means) that he was told to remain silent about Merrill, otherwise his board of directors would be disbanded and the management team would be fired. Appalling yes, but does this surprise you?

What would you do? Remain silent? Cancel the deal? I know what I would have done, I would announce the piece of crap Merrill had become, cancel the deal so my shareholders didn't get left holding the "bag of pooh", and then simply resign. How could you wake up and go to work in the morning knowing you just shafted your shareholders over a blackmail? How could you remain silent? Was his silence going to save the system? No, it can't be saved because "it is what it is", the debt, derivatives, mal investment, etc., were all already in place, NOTHING could reverse that. If the system was so close to collapsing just a few months ago, how far away can we be now?

So, as for Mr. Bank of America, either he is a spineless buffoon that threw his shareholders under a steamroller, or he lacks the moral values to tell the truth no matter what the consequences, even if they included losing your job. Maybe he was afraid of becoming Mr. "Freddie Mac" and turning up as a suicide. Who knows? The point here is the confidence (lack of) this instills in foreigners with investments in the U.S.

Supposing Mr. Lewis is telling the truth, this means that Paulson and Bernanke are both "blackmailers" and liars. They told us umpteen times that the "banking system is solid", the "system is sound". WHO to believe? I think they are ALL full of $#I+!!! The system is busted, the banks are broke, the Dollar has ZERO intrinsic value, and the Treasury has become the biggest beggar in the history of the world. And now we get the stress test results? Yeah, I can't wait to see these morsels of truth and wisdom!

This can of worms that Mr. Lewis has opened has huge ramifications, most importantly one of CREDIBILITY. I can only guess what my thoughts would have been as a child growing up in the 60's, the Sec. of the Treasury and Fed Chairman lied and blackmailed someone? So what if Merrill went down, they are only one Investment house, you mean the system is THAT fragile? This is the world's biggest debtor trying to hide JUST how weak, debilitated, and fragile the whole situation has become. One can only hope that foreigners go deaf, dumb, and blind for few a weeks since it is they, that Treasury relies on so heavily to fund our debt.

From today forward, it is now clear that ANYTHING can happen at ANYTIME. Everything is not what it seems to be, nothing is real in the financial world, and everything is worth nothing. As it turns out, the economy, real estate, and stock markets were all propped up and "Bulled" by borrowed money and dirty tricks. The entire "fiat" bull run has been bull shit, and to think we EVER questioned Gold ownership. No wonder we have been told on a daily basis that Gold is a "barbarous relic" and has no use. So they lied to us, what's the big deal? They will lie to us again tomorrow, ...and your point is? Clearly, things aren't what they used to be, now I sound like my parents. Sorry for the rant, I do feel much better though!

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Bof A and the DYKE!

The revelation that Bank of America was forced to buy Merrill Lynch is the nail in the coffin, the straw that broke the camels back, the beginning of the end...how many more sayings do you we need??!!

There are no more fingers to stick in the dyke!

This revelation is HUGE on so many fronts I can't even begin. First of all Bank of America will be sued by EVERY SHAREHOLDER for accepting this deal, not disclosing the "material information", falsely promoting the deal to the public and hiding the truth. The Treasury and the Federal Reserve will be investigated for illegally forcing the merger without any congressional approval or ANY PUBLIC DISCLOSURE....

AND THEY HAVE BEEN LYING TO THE PEOPLE FOR MONTHS THAT WE WERE AT THE BOTTOM AND THE BANKS ARE FINE!

Bank of America will likely see a "Run"on the bank" within the next few weeks as the liability from this is incalculable!

It's about to get VERY UGLY out there!

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Andrew Cuomo's Smoking Gun

New York State Attorney General has unleashed a letter today which could well lead to an avalanche of lawsuits against, Bank of America, Ken Lewis and the BAC board, John Thain, Henry Paulson, the U.S. Treasury and Ben Bernanke et al at the Fed.

If you read through Mr. Cuomo's letter, there can no question in anyone's mind that Lewis, Paulson and Bernanke are guilty of committing fraud. This must be a serious issue because when it was being exposed on CNBC, CNBC quickly cut away just as Ken Lewis was telling Erin Burnett that he was told to keep his mouth shut.

At issue is whether or not Henry Paulson and Ben Bernanke, along with staff members wholly and severally at the Treasury Department and the Federal Reserve, forced Ken Lewis and the board at BAC to complete its merger with Merrill Lynch, despite Ken Lewis' decision that the financial condition of MER at the time of the merger agreement had been fraudulently misrepesented, covered up and had materially changed.

It would appear from a close reading of the letter sent from Andrew Cuomo to Government officials listed, that Ken Lewis was going to invoke a Material Adverse Change clause, due to a substantial deterioration in the assets of Merrill Lynch which appear to have been covered up during merger negotiations (i.e. hidden from sight during the due diligence process), in order to either abort or substantially renegotiate the terms of the BAC/MER shotgun wedding. Here is what the MAC clause is all about:

"THE MATERIAL ADVERSE CHANGE CLAUSE (MAC) as a closing condition has achieved permanent status as one of the most highly negotiated parts of acquisition agreements. The basic premise underlying a MAC is that the purchaser should receive the benefit of the bargain. In practice, a MAC included within the closing conditions of an acquisition agreement provides purchasers with an "out" in the event of unforeseen material adverse business or economic changes affecting or involving the target company or assets between the execution of the definitive acquisition agreement and the consummation of the transaction"

Please read the Cuomo letter in its entirety, as it contains statements and accusations from both Lewis and Paulson that are both accusatory of each other and self-incriminating. Here is just one snippet:

"Bank of America's attempt to exit the merger came to a halt on December 21, 2008. That day, Lewis informed Secretary Paulson that Bank of America still wanted to exit the merger agreement. According to Lewis, Secretary Paulson then advised Lewis that, if Bank of America invoked the MAC, its management and board would be replaced" page 2.

There is much more in that letter which can be used to go after every person listed above. Bernanke has denied making any of the statements contained in that letter. My bet would be that Bernanke is now on record lying.

At the very least, all the people listed above will subject to massive lawsuits by Bank of America shareholders. Hopefully Mr. Cuomo will prove to be more forthright than his predecessor, Eliot Spitzer who used his attacks on Wall Street to launch his bid for Governor of New York, and will use this as an opportunity to pursue justice for all the parties involved, not the least of which is the U.S. Taxpayer.

Here is the letter from Mr. Cuomo:

http://zerohedge.blogspot.com/2009/04/cuomo-letter-exposing-paulsons-and.html

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This Cuomo thing is getting gooooood

This is a postcard perfect example of what happens when rats are trapped in a corner - they turn on each other:

Paulson Contradicts Bernanke, Blames Bernanke For Lewis Threat

"Hank Paulson admitted to Andrew Cuomo that he threatened to oust Ken Lewis and the Bank of America board if Bank of America invoked a Material Adverse Change (MAC) clause to block the deal, Cuomo says. Paulson also added, however, that he made this threat at the request of Ben Bernanke"

http://www.businessinsider.com/henry-blodget-paulson-contradicts-bernanke-blames-bernanke-for-lewis-threat-2009-4

Ken Lewis Shafted Bank Of America Shareholders To Save His Job (BAC)

http://www.businessinsider.com/henry-blodget-ken-lewis-shafted-bank-of-america-shareholders-to-save-his-job-2009-4
I think the media is either being told to not report all of this, or they are vastly underestimating the seriousness of what Cuomo has unleashed today. This is going to be epic entertainment watching this unfold.

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The cover of the latest Time magazine includes the headline story -- THE NEW FRUGALITY. The story is about Americans cutting back everywhere and in everything. Personally, I think the frugality trend is just starting. Right now, I don't think most people view the current recession as a major economic phenomenon. I think the public impression is that the government "won't let it happen," and that the government will stabilize the economy by the end of the year. The public reads about the trillions of dollars the Fed and the Treasury are spending, and it believes what we are going through is just a deeper version of the recessions that have plagued the US since WW II.

I've thought all along that the steadily rising rate of unemployment and loss of income will be the surprises of this bear market. Unemployment will produce a downward spiral of negative growth in the US. When an individual or a family leader is laid off, the full impact of a loss of income hits the unit. They will immediately cut back in every area possible -- doctor's visits, dentistry, meds, clothes, automobiles, travel, vacations, expensive colleges, food, entertainment, etc. This sets off a "downward spiral." It's a spiral that only halts with exhaustion.

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Most Americans still cannot fathom what lies ahead … still believing that once the correction is over, life will go back like it has been for so long. Don’t think so. Years ago it was my contention that the standard of living in America would go down by 35%. I am sticking with that notion.