Thursday, June 11, 2009

Another headlining story virtually ignored by the mainstream media

I was appalled today to read the following story about the Feds strong arming the Bank of America Execs. to buy Merrill Lynch or their jobs will be in jeopardy!! I just can't imagine why most Americans are not outraged with the level of movement to suffocating and dangerous socialism by our government. The scary part is that we are only a couple of months into the new administration, wow!! Worth mentioning that within 5 minutes of having read the below article a new headline appeared which only adds to the point being made, here is a sampling: 
"The Senate struck a historic blow against smoking in America Thursday, voting overwhelmingly to give regulators new power....The legislation, one of the most dramatic anti-smoking initiatives since the surgeon general's report, would give the Food and Drug Administration authority to regulate the content, marketing and advertising of cigarettes and other tobacco products."
Look, I am against smoking and passionate about it as the next guy but I am more passionate about our freedoms. I am more passionate about our government staying out of telling the American public what to do and when to do it. Let's face it we are not in China or the old Soviet union or are we? I digress. I don't need to say anymore about this, I feel the pasted article below from the AP on 6/11/09 should speak volumes to anyone with half a brain! C'mon people please wake up before we lose everything so many fine young American men and women have died for us to enjoy and to take for granted.

CEO: Government pushed bank to buy Merrill Lynch

WASHINGTON – House lawmakers on Thursday accused federal regulators of a gross misuse of power in orchestrating a "shotgun wedding" between Bank of America Corp. and Merrill Lynch & Co. that cost U.S. taxpayers $20 billion.

They also took aim at Bank of America Chief Executive OfficerKenneth Lewis, questioning whether he played dumb last fall as Merrill's financial losses mounted and threatened not to go through with the merger to squeeze money from the government.

"Why did a private business deal announced in September and approved by shareholders in December — with no mention of government assistance — end up costing taxpayers $20 billion in January?" asked Rep. Edolphus Towns, D-N.Y., chairman of the House Oversight and Government Reform Committee.

The panel has been investigating the deal, including whether federal officials pressured Lewis and urged him to keep quiet about Merrill Lynch's financial problems. Not divulging that information would have violated Lewis' fiduciary duty to the bank's shareholders.

In testimony before the committee, Lewis said publicly for the first time that his job was threatened after he expressed second thoughts about the merger. Lewis said then-Treasury Secretary Hank Paulson and federal regulators made clear that if the bank reneged on its promise they would force his ouster and that of board members at the bank.

"What gave me concern is that they gave that threat to a bank in good standing," Lewis told the House Oversight and Government Reform Committee. "So it showed the seriousness with which they thought that we should not" back out.

Paulson and Federal Reserve Chairman Ben Bernanke also pledged government aid to Bank of America to help absorb the losses, Lewis said.

Bank of America ultimately received $45 billion from the government's bank bailout program, $20 billion of which was tied to its acquisition of Merrill Lynch.

Lewis said he was never asked by Paulson or Bernanke to withhold information from his shareholders. However, Lewis said Paulson told him in a telephone call that the government was reluctant to put the terms of the deal in writing because it would have prompted public disclosure.

The Federal Reserve declined to comment on Lewis' testimony.

A spokeswoman for Paulson has said the former Treasury secretary felt a letter would have been too vague to help Bank of America and only served to rattle markets by creating more questions than answers. She said questions about disclosures by the bank were left up to the Bank of America.

Towns said he plans to invite Bernanke and Paulson to testify at a later hearing.

Lawmakers on the committee said they were troubled by Lewis' testimony as well as internal Fed documents related to the deal.

In one e-mail, Bernanke said he thought Lewis' threat to pull out of the deal was a "bargaining chip" and "we do not see it as a very likely scenario at all."

Other e-mails by federal analysts suggested they thought it suspect that Lewis claimed to be surprised by Merrill's losses given the clear signs of a deteriorating economy.

An employee at the Richmond Federal Reserve said Bernanke had made it clear that if Bank of America backed out and needed financial assistance, "management is gone."

Towns and Rep. Darrell Issa, R-Calif., the committee's top Republican, said the merger was an obvious "shotgun wedding" that came at the expense of the taxpayer.

However, Rep. Dennis Kucinich, D-Ohio, said he thought Lewis was the one who was pressuring the government.

"There's been a misconception here that the government put a gun to the head of Bank of America, when it's quite possible that it was the Bank of America that put a gun to the head of the Fed by threatening" to back out, Kucinich said.

Lewis said he did nothing wrong. In the end, the decision to go ahead with the acquisition — with the promise of government support — was in everyone's best interest, he testified. "This course made sense for Bank of America and its shareholders, and made sense for the stability of the markets," he said. "We viewed those two interests as consistent."

Just a few weeks after the deal was completed, Bank of America's fourth-quarter earnings report showed the hit taken by its balance sheet because of the Merrill Lynch transaction, which made Lewis the target of shareholder anger.

In January, Bank of America reported a $2.39 billion fourth-quarter loss, and Merrill Lynch disclosed a loss of more than $15 billion.

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