Yesterday, Bank of America decided that they shouldn't just buy Merrill Lynch as a business move. No, it was more like a public service. As such, they are entitled to be compensated by the government us. How many business mergers, hostile takeovers, and acquisitions can you think of that required $115 billion of taxpayer money to make them happen?
As I understand it (and I don't even pretend to), the money wasn't a requirement, just a perk.
It's a little like telling a bank that you'll buy a few of their foreclosed properties but that to make it worth your while, they need to give you the properties and then pay you on top of that for your beneficence. How far do you think that one would get?
Nothing wrong with businesses expanding and acquiring other businesses - as long as they have the capital to do it. Using public funds removes it from the area of a business move. When is this wayward thinking - and spending - going to stop?
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Steve, thanks for the post I was unaware of this and all I have to say is they wonder why we are all so pi--ed off with them!!
And they wonder why we got in this mess? Seems like instead of digging our way out they keep adding more depth to the hole. And Bank America seems to be coming out like a rose. I join the hands up of who is ticked off!
Oh man. Smart business people find loopholes everywhere, and think people like you aren't smart enough to catch on to them.
Thanks for telling us about this.
I LOVE this saying....it is soooo true. The rich will always be taken care of! G E Z Z E !
Patricia Aulson Portsmouth NH Real Estate
I agree with the phrase you are using --- thanks for sharing!
Steve, It's like pigs coming to the troth. The banks have a new business model, bad investment get money back and grow stronger...
And they wonder why so many off us shake our heads and moan when we hear these things...really...they still dont get it!!
Christopher,
Thank you. The real fun starts next week when the new administration becomes official. :)
Steve
Connie,
Unfortunately our hands are not visible above all of those with their arms outstretched to take. :)
Steve
Kris,
Thank you, but now that we understand what's going on, how do we impact or reverse it? :)
Steve
Patricia,
Uncanny isn't it how the system works? Those who don't need anything get it. :)
Steve
Norma,
Really something. About all we can do is stand and watch with amazement. :)
Steve
Paul,
I'm thinking the new business model is ask until you get. :)
Steve
Jan,
I'm more troubled by the posssibility that they get it and don't care. :)
Steve
Steve, I am scratching my head as well. In fact it is starting to hurt. I wonder if the Countrywide acquisition has anything to do with and BofA simply did not have the money to complete the Merrill Lynch purchase? If that is correct, then the FED's may have actually done the right thing by not letting Merrill go down, which is twice as big as Lehman and the repercussions could have been devastaing. Remember how much a tailspin the economy and markets fell when they let Lehman go in September? UGLY
Bo
Welfare for business. Not a new concept but, currently being taken addvantage of. We have to deal with BoA abunch and it is a nightmare. They are not customer friendly and don't deserve to have any help with a buy of any kind.
Terry Miller
Bo,
Everyone keeps telling us that we can't afford to let anyone fail - why not - especially if we're only forestalling the inevitable. BofA got the cash for one simple reason as near as I can tell - they wanted it and Congress was willing to fork it over. They didn't actually need it. :)
Steve
Terry,
Sort of puts a whole new slant on "Bank of America" doesn't it? :)
Steve
Wow - that bailout did wonders. I mean BOA of still advertising uncompetitive interest rates in our market. Great government plan - it sure motivated BOA to increase lending in our area (all sarcasm intended).
Steve
I think history is going to find this as the fleecing of the American people. I also think all this money is not making a different. the banks still want more. they are holding us hostage.
Richard
Richard,
Thanks. History has proven that government spending solves nthing - certainly not a slow economy. :)
Steve
Hi Steve - that whole thing just stinks. I want to be one of those rich that always seem to be taken care of. We need to go study just what it is that companies like BoA do to get that type of treatment so we can all receive the same....... I like the old ways of doing business - do what you can pay for and afford to do.
Ann
Ann,
Part of me agrees with you and part of me says no way - that's not why I'm in business. :)
Steve
Ryan,
It makes absolutely no sense, and there isn't a shred of gratitude by BoA connected with this. :)
Steve