Quote of the Day

Ken Lewis, CEO of Bank of America in an interview on CNBC had to say what will be the quote of the day.

Question (paraphrased unless I find a transcript): The deal happened in 48 hours. Merrill Lynch has over a trillion dollars in assets. Are you comfortable with the due diligence of Merrill Lynch?

Ken Lewis answer: I really am. We really have a core competency in due diligence.

Are you kidding me? That is hilarious. We will see how the country wide deal plays out.

I have still been trying to understand this deal. Yves over at nakedcapitalism.com has a good insight from a little sentence in a Financial Times article that points out that Fed has suspended rules that prevented deposits to fund investment banking operations. That is almost unthinkable because of the much greater risk you often take in investment banking. This potentially dramatically lowers the cost of funding for investment banks as you can use cheap deposits potentially increasing the returns you make in investment banking. That could be pretty scary as a depositor or if your the FDIC.