December 11, 2008

Kicking Ken Lewis in the head, or, What I'd like to be doing

Ken Lewis, as many of you don't know, is the CEO of Bank of America. He's the asshole that soaked BofA shareholders (a group which mercifully doesn't include me) to the tune of $50 bn for Merrill Lynch which was, conservatively, worth $20bn at the time.

Now he's going around talking about 'no sunshine' in the economy until the second half of next year.

Ken Lewis, CEO at BofA ... said he was hopeful conditions would improve in the second half of next year. He sees no bright spots for the economy before then.

“Times are really tough, and we don’t see any short-term rays of sunshine,” he told the more than 600 attendees at the Westin Charlotte hotel. When the panel was asked for advice on how to get through the next six months, Lewis recommended a conservative strategy of hoarding cash and capital and waiting for the storm to pass. “Think of getting through this as the primary objective,” he said.

It's one thing for someone like Peter Schiff to bleat on endlessly about how bad things are. It's quite another when it's Ken Lewis, the head of a global bank that holds 10% of the deposit base in the US. While the government has gone out of it's way to pump money into the economy to keep us out of a deflationary spiral, here's Ken Lewis, dumbest of the dumb, telling everyone to hoard cash under their mattress.

Not to mention that a bank that doesn't lend is a worthless thing. It really depresses income and earnings. Which means poorer shareholders. But that's OK, Ken's got your back. He'll make you money magically in the second half of the year. The unicorn told him that was when things would turn.

No, Ken, things will improve pretty dramatically and pretty quickly next quarter. And when BofA misses the boat, one has to wonder how long your board will keep you on. Especially after overpaying for an asset by $30 billion.

Posted by mcblogger at December 11, 2008 11:59 AM

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