Merrill Lynch rocked: At first, Merrill reported a $7 Billion loss due to poor sourced mortgage investments. Analysts on the street estimated that it was more like $12 Billion. Now Merrill has become a little more honest and is expected to report a $15 Billion loss, as it scrambles to raise cash and slow hiring. The DOW slides as the skies darken over the entire financial sector. American Express and Tiffany have both been rocked today due to lower consumer spending, a trend that will continue all year. Even McDonalds is down a whopping $4 today.
Bank M&A action: Charlotte-based Bank of America has decided to purchase bleeding mortgage lender, Countrywide, for $4 Billion. That would make Bank of America the nation's largest mortgage lender. Details of the deal are sketchy, which makes this amateur analyst wonder about the risk and wisdom of such a deal. Countrywide shares have fallen 15% today in reaction to this news. Meanwhile, Chase is in preliminary talks to purchase Washington Mutual, which is also seriously bleeding in this lending crisis. That would almost make Chase the nation's second largest bank. But it would be a solid third place, right behind Bank of America and Citi. Watch more banks report losses next week. Eyes will be on PNC, SunTrust, and other 'super-regionals' similar to WaMu. Big banks could bail-out smaller banks.
Think the surge worked?: The mainstream media has reported that the surge in Iraq worked. But now, as the surge has to wind-down this spring, the pentagon is saying that the overall success of the surge has a 50/50 chance at best. Deputy Assistant Secretary of State Mark Kimmitt acknowledged at a right-wing think tank that the surge will be judged a failure if the Iraqi government cannot unite the country, reconcile major political stalemates, and keep violence levels relatively low as they were in late 2007. The video of Mr. Kimmitt speaking is at the ThinkProgress link above.
And speaking of Iraq violence: A new World Heath Organization report has a very conservative estimate that 150,000 Iraqis died violently during the first 3 years of the US occupation. At first glace, it seems to be a rebuttal to last year's Lancet study, which estimated 600,000 excess deaths (by all unnatural causes, including disease, suffered by anyone who died in Iraq). But Juan Cole points out the study's methodology and assumptions, and it turns out that it could have easily concluded that 250,000 have died. But the WHO report opted to keep the number conservative. Add two more years that the report does not cover, and the Lancet study isn't so outrageous after all. In any case, the bottom line is we destroyed a country, and we made ordinary Iraqis refugees, widows, orphans, amputees, disabled, and dead. No number crunching can get around our nation's worst foreign policy decisions in 30 years, and what has become part of our generation's legacy. And for the most part, we have ignored it.
Rudy's sinking ship: Senior Giuliani staffers are forgoing paychecks this month. And while the mainstream media did not report that Rudy spent nearly $3 Million on New Hampshire, and finished behind Ron Paul, it is now becoming apparent that his strategy to focus on Florida is going to backfire. He might still finish third in Florida. But there's no way he can win the GOP nomination now.
Rudy's fiscal insanity: Oh, and Rudy knows his economics! He has repeated his plan to not only cut taxes further for the rich, but he'll balance out those cuts with addiditonal tax cuts! The economy needs stimulus and Rudy's proposed cuts are twice as big as Ronald Reagan's. Economists chuckle.