Why is Bank of America first and foremost in the SEC’s mind? Here’s a company that helped prevent a potential calamity in our financial economy with its acquisition of Merrill Lynch, but has morphed into being a whipping post for capitalism in America it seems. How come the SEC isn’t focused like a laser-beam on Fannie Mae and Freddie Mac, the two government sponsored entities that really pushed the financial markets to the brink of disaster. Oh, right; they’re both effectively delisted now and placed in government “conservatorship”. Having gone from a high of $86.75 in December of 2000 to a low of $0.33 in November 2008, the SEC (and congress) wouldn’t want to remind us that Fannie Mae (and Freddie Mac) were exempt from SEC filing standards for years while they both sat in the S&P 500 index and wound up being large holdings in everyone’s 401(k) and mutual fund.
To put some numbers around a comparison of BAC and FNM let’s consider the gains and losses of each. Being a shareholder of BAC your shares would have gone from a high in Dec. 2006 of $53.87 to a low in Feb. 2009 of $3.95, a percentage loss in value of over 1,360%. With FNM you would have gone from a high of $86.75 in 2000 to a low of $0.33 in Nov. 2008, a percentage loss of over 26,000%. On the upside with BAC, your $3.95 stock has now increased in value by some 402% to close recently at $15.88 a share. With FNM your stock would have gone from $0.33 to $1.02, a gain of 309%. And the SEC is asking for $150 million from Bank of America?
By two other measures BAC is on the road to profitability – it has repaid its TARP funds with interest to the tax-payer and it’s acquisition of Merrill Lynch has turned a profit for shareholders. On the governance front, BAC has settled one of the most politically driven SEC suits in memory for $150 million and has seen its CEO, Ken Lewis, forced into retirement for essentially agreeing to acquire Merrill Lynch and swallow all its mounting losses at the behest of the federal government; who then had the gall to turn around and sue the firm for doing its bidding, thereby providing political cover for congressional crony capitalism. In fact, FNM and FRE had their loss ceilings raised just before Christmas weekend by some $400 billion. Which means that the tax-payer is being made more liable for more congressional folly. So tell me again why Bank of America is the bad guy here to be persecuted?
One has to marvel at the argument that what BAC did put shareholders at risk when congress has been placing shareholders AND tax-payers at risk for years vis-à-vis the lies that were Fannie Mae and Freddie Mac. Again, it’s all about the “misdirection” – keep the klieg-lights shining on all those bad old capitalists and off the dolts in congress who have foisted this economic calamity upon America.
To put some numbers around a comparison of BAC and FNM let’s consider the gains and losses of each. Being a shareholder of BAC your shares would have gone from a high in Dec. 2006 of $53.87 to a low in Feb. 2009 of $3.95, a percentage loss in value of over 1,360%. With FNM you would have gone from a high of $86.75 in 2000 to a low of $0.33 in Nov. 2008, a percentage loss of over 26,000%. On the upside with BAC, your $3.95 stock has now increased in value by some 402% to close recently at $15.88 a share. With FNM your stock would have gone from $0.33 to $1.02, a gain of 309%. And the SEC is asking for $150 million from Bank of America?
By two other measures BAC is on the road to profitability – it has repaid its TARP funds with interest to the tax-payer and it’s acquisition of Merrill Lynch has turned a profit for shareholders. On the governance front, BAC has settled one of the most politically driven SEC suits in memory for $150 million and has seen its CEO, Ken Lewis, forced into retirement for essentially agreeing to acquire Merrill Lynch and swallow all its mounting losses at the behest of the federal government; who then had the gall to turn around and sue the firm for doing its bidding, thereby providing political cover for congressional crony capitalism. In fact, FNM and FRE had their loss ceilings raised just before Christmas weekend by some $400 billion. Which means that the tax-payer is being made more liable for more congressional folly. So tell me again why Bank of America is the bad guy here to be persecuted?
One has to marvel at the argument that what BAC did put shareholders at risk when congress has been placing shareholders AND tax-payers at risk for years vis-à-vis the lies that were Fannie Mae and Freddie Mac. Again, it’s all about the “misdirection” – keep the klieg-lights shining on all those bad old capitalists and off the dolts in congress who have foisted this economic calamity upon America.
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