John Thain has been “ousted” from Bank of America. He is leaving the firm after Merrill posted a US$15b loss in the latest quarter.

Poor John, or poor John? To me, the man has done his job.

He got Ken Lewis, the big talking bozo, to pay through his nose for Merrill Lynch, the bank which now looks like it was a crap asset.

“Lewis has spent some $130 billion on major mergers to build Bank of America, but has raised the hackles of investors who thought he rushed too quickly to buy Merrill. … Read the rest of this entry »

“Merrill was paying typical Wall Street pay… We intend to pay market instead.” – Ken Lewis

Ken Lewis, CEO of Bank of America, has gone on the record making the statement above. And while this statement may seem to make sense to some, it really betrays Ken’s confusion and fundamental lack of understanding about Wall Street and the investment banking business.

Mr Lewis seems to imply that there is a difference between “typical Wall Street pay” and “market pay.” But While Merrill Lynch gives generous pay packets to its bankers and other staff, this WAS market pay – for the investment banking business. That’s why it was typical. Typical Wall Street Market Pay!

But you see, Ken Lewis really didn’t mean to say he intended to “pay market,” because “paying market” means paying “typical Wall Street pay.” What Ken Lewis really meant was this – We intend to pay “commercial bank pay”. After all, that’s what BoA has been, is, and will continue to be, predominantly – a huge lumbering commercial bank, and a second rate investment bank. Acquiring Merrill isn’t going to change that, and here’s why:
Read the rest of this entry »