Bank of America: The next Sarah Palin?

Floyd Norris did live blogging today on his New York Times financial blog Notions on High and Low Finance.

At 1115 AM, he blogged:
Merrill is trading, as I write this, at $21.47 per share. That is a 14 percent discount to the value of the Bank of America stock that is being offered. Each Merrill share will be exchanged for 0.8595 shares of B of A, now trading at $29.01 and putting the value of the offer at $24.93 per share.

Merrill Lynch closed at $ 17.01. Why would you agree to pay 24.93 for something that is by the dumps and available at 17.01.

Expect that story to flare up. I don't understand much of the financial world, but I am definitely curious about Bank of America doing that. Or has it decided that Sarah Palin has too long been the headlines.



Lew from UK on the website commented:

"Forgive me for being a bit slow on this (I’m an engineer rather than an accountant), but - I read somewhere in all the stuff published today, that the Merril Lynch deal (I can already see the headline “Lynch mobbed”) would mean that BoA would would wind up “technically” under-capitalised. Is this true ? And if so, doesn’t that mean that either (a) they will need to embark on some sort of fire-sale / fundraising enterprise to bring things back into balance, or (b) that they’d be risking (and they’d need government complicity to achieve this) a new, bigger game of chicken where BoA tests the limits of “too big to fail” ?"

Something is clearly happening. And as I am writing this Nikkei just opened. Eight minutes ago. And it is 344.92 points down, or 2.82 %.

With the failing U.S economy and Wall Street banks, finally are we seeing the end of our fling with Sarah Palin? Call it the upside of the downside in the economy!
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Update- 09/16/2008 - Pictures really are worth a million words. Here is what sums up Lehmann Monday. Click on the sideshow. Courtesy The Wall Street Journal. See it. Come on, for once let us love our bankers.