Jeff Cross

What's the BofA / Merrill Synergy?

Paying $29 for Merrill is the stupidest thing I've heard of since the government destroyed the value of the agency pfd stocks and thereby cratered the regulatory capital surplus of the US small banks (which were, until this week, the most active lenders, having not immolated themselves with all kinds of fancy products they didn't understand). I suppose one act of colossal and egregious idiocy is the weekly standard now.
Of course, the $29 is no doubt based on a stock swap and if BofA opens down 50% tomorrow and stays about there (the first seems more likely than the second, but niether seems unreasonable), what Merrill shareholders get will really only be a reasonable $14.50; what the BofA shareholders get is best not discussed.