Comments on: Bank of America to buy Merrill Lynch, AIG to sell off assets, Lehman Brothers heading toward bankruptcy http://blogofbile.com/2008/09/14/bank-of-america-to-buy-merrill-lynch-aig-to-sell-off-assets-lehman-brothers-heading-toward-bankruptcy/ from the bowels of the mind Wed, 07 Jan 2009 18:20:37 +0000 http://wordpress.org/?v=2.6.5 By: beetlbumjl http://blogofbile.com/2008/09/14/bank-of-america-to-buy-merrill-lynch-aig-to-sell-off-assets-lehman-brothers-heading-toward-bankruptcy/#comment-2682 beetlbumjl Mon, 15 Sep 2008 12:09:15 +0000 http://blogofbile.com/?p=2067#comment-2682 tinfoil theory: Bank of America pays a premium for Merrill Lynch so it can dump an inflated equity onto the Fed's discount window.  It's worth $29 a share, honest, Ben!  I think the article I linked to yesterday about the Fed is important because in the past, they only accepted high grade securities.  Now that they are in the business of taking full fledged equities, how does that position them in regards to the stock market?  (Hint: incredibly less impartial.)  Who suffers the loss if/when the market tanks 20-30%?  Once again, nobody cares whether this is actually legal or not. tinfoil theory: Bank of America pays a premium for Merrill Lynch so it can dump an inflated equity onto the Fed’s discount window.  It’s worth $29 a share, honest, Ben! 

I think the article I linked to yesterday about the Fed is important because in the past, they only accepted high grade securities.  Now that they are in the business of taking full fledged equities, how does that position them in regards to the stock market?  (Hint: incredibly less impartial.)  Who suffers the loss if/when the market tanks 20-30%?  Once again, nobody cares whether this is actually legal or not.

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