Three Troubling Questions About Bank of America Corp (BAC)’s Epic Acquisition of Merrill Lynch

The pain of the deal

Bank of America’s share price took a serious hit as a result of this deal. And the U.S. government ultimately provided Bank of America with an additional $20 billion in aid as a result of the bank taking on Merrill’s losses. While taxpayers were ultimately repaid, investors paid dearly for that epic merger that was put together in less time than it takes many of us to choose a new appliance.

Despite the apparent rottenness of it all, Warren Buffett has said that Ken Lewis’ decision to buy Merrill “may have helped avert a total meltdown.”

That takeaway from Buffett, which is widely shared by other observers, might just be the bitterest legacy of the financial crisis. Wall Street created a horrible mess, and then we all had to stand back while the bankers and government policymakers salvaged what was left of our teetering financial system. Somehow, we were supposed to feel grateful that things didn’t turn out worse. Unsurprisingly, not many people feel like celebrating that dubious outcome.

The article 3 Troubling Questions About Bank of America’s Epic Acquisition of Merrill Lynch originally appeared on Fool.com and is written by John Reeves.

John Reeves has no position in any stocks mentioned. The Motley Fool recommends Bank of America. The Motley Fool owns shares of Bank of America and JPMorgan Chase.

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