Merrill's Thain ousted to save BofA's Lewis: analyst

Bank analyst Tom Brown lost his job at Donaldson Lufkin Jenrette for ridiculing First Union CEO Ed Crutchfield and his expensive purchase of Philadelphia's CoreStates ten years ago. That freed Brown to work for hedge funds, with varying success, and to build a Web site -- www.bankstocks.com -- that's been a cheerful platform for jeering at ruinously expensive bankerly empire-building, especially by First Union's late successor, Wachovia Corp., and its Charlotte, N.C. rival, Bank of America Corp.

Check the site today for Brown's take on how and why BofA CEO Ken Lewis, after gaining control of Merrill Lynch, used its deteriorating finances to throw Merrill Lynch head John Thain under the bus, while collecting $20 billion from worried federal officials in the last days of the Bush Administration to fund the deal. Excerpts:

Lewis determined to "unceremoniously push Thain out of the way—and trash him in the process—as a way to protect his own job."

To help fund the Merrill deal, Lewis "trumped up the expected losses in order to wheedle guarantees from the federal government... "But when the whispers started that Lewis himself might soon be out of a job because of the Merrill mess, he went nuclear on Thain. Suddenly we began reading about Thain's decorating habits, and those supposedly clandestine bonuses and the skiing vacations. To cap things off, Lewis makes a dramatic trip to New York to seek Thain's resignation at midday....

"The whole fiasco had nothing to do with Thain's integrity or competence—and everything to do with Ken Lewis's greed and ego...

"Ken Lewis... has gone from high-level BofA lifer to, briefly, industry visionary, to the latest Charlotte egomoaniac to become undone by his own ambition... He should resign now."