Merrill- Gone But Not Forgotten

Although the Bank of America/Merrill deal is done and should be old news, many angry questions remain about how this government-backed-merger-debacle was completed without informing stakeholders (i.e. BAC shareholders, Merrill's board, US taxpayers) of some crucial details.  For example, how is it that Merrill Lynch managed to lose $15 billion in the fourth quarter, but conveniently only after Bank of America shareholders approved the deal? Here's another good one:  Why did Mr. Thain waste Merrill's last board meeting on December 8th to plead for a $10 million bonus, when he perhaps should've mentioned the $15 billion hole in Merrill's finances?  Nevermind, that one was rhetorical.  Oh wait, I have another one:  Why, for the love of God, was J.C Flowers paid $20 million for his "expertise" to advise Bank of America on the Merrill purchase, when his "extensive due diligence" somehow overlooked said $15 billion in losses?  But wait, there's more:  How did the Fed get roped into guaranteeing credit derivatives positions as part of its $138 billion guarantee to Bank of America? How about:  Why did Bank of America learn of the losses from Merrill's transition team and not John Thain?  Better yet: Why does Bank of America care about retaining any of the senior clowns from Merrill?  Didn't they already run the company into the ground?  Are they really going to threaten to leave?  Who cares?  Let them go start their own business using their own money.  Some of these guys that have milked their free career calls to the max and bled shareholders dry in the process should have to go out on their own and risk their own capital for once.  

What I have the hardest time understanding as I read all of the gory details of what went down in the past couple of weeks that led to the government ultimately stepping in and allowing Merrill to live, is how on earth John Thain has not been hung out to dry.  Frankly, I couldn't believe how the press, shareholders and the SEC let Mr. Thain get away with virtual accounting fraud following the firm's second quarter earnings results.  For those who don't recall, Mr. Thain emphatically stressed that the street was grossly undervaluing Merrill's CDO portfolio.  Then, around 10 days after second quarter earnings, he announced another $5 billion loss for the third quarter and that Merill had "sold" the CDOs to an investment fund for 22 cents on the dollar plus 75% financing.  Clearly it was not the Street who was undervaluing Merrill's assets.  Why anyone trusted Merrill's marks on any of its portfolio after that kerfuffle is a mystery.

What happens next?  Will the angry mob force out Ken Lewis?  I, for one, hope not.  Why?  Because I really worry that somehow, Teflon Thain will wind up in charge.