Resistance is futile , retrade or die

Bank of America’s Merrill Takeover May Be Tough Deal
By Josh Fineman
Dec. 5 (Bloomberg) -- Bank of America Corp. Chief Executive Officer Kenneth Lewis’s takeover of Merrill Lynch & Co., the capstone of more than $100 billion in acquisitions he’s made since 2001, may prove the hardest to digest.

“There are some hand grenades on the balance sheet that are going to blow up on Bank of America,” said James Ellman, a former Merrill Lynch money manger who is now president of San Francisco-based SeaCliff Capital LLC. “The cost savings are going to be nowhere near what they’ve already promised.”

“If someone had told me a year ago that things would be worse in December 2008 than in December 2007, I would have thought that person was half crazy,” he said at a conference in Charlotte, North Carolina, the bank’s hometown. Lewis doesn’t expect a recovery until the second half of 2009.

“The bankers all think the brokers are too highly paid and the brokers all think the bankers don’t work hard enough,” said Greg Donaldson, director of portfolio strategy at Donaldson Capital Management in Evansville, Indiana .

“The companies he’s been acquiring all make sense strategically,” Ellman said. “But the timing and price almost always seems to be off.”