Arnold Kling  

Banana Republic Watch

Not Your Father's Real Busines... The Law of Inflated Expectatio...

William D. Cohan gives the play-by-play of the Merrill-BofA-government saga.

Lewis said Bernanke told him, "We view you as strong and having acted appropriately in difficult circumstances ... We'll make sure you continue that way ... We want to do something that when the public hears about it [the new government financing], your stock goes up."

Read the whole thing. It's beyond comment.

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COMMENTS (3 to date)
david writes:

I like that you remembered to not title this 'one-party state watch'.

(cue self-righteous comments noting that both parties suck, etc.)

Captain Awesome writes:

When is securities fraud not securities fraud?

When the Fed and/or Treasury do it, apparently.

Norman Pfyster writes:

Maybe it should be viewed as compensation for destroying billions of dollars of stockholder value by forcing BoA to take on Merrill. The question should be whether the convoluted method of compensating BoA for purchasing Merrill was cheaper than directly covering Merrill's losses and permitting Merrill to survive or letting Merrill fail.

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