Thursday, 23 April 2009

Henry Paulson meets Hercule Poirot

Documents are surfacing from Andrew Cuomo's office in New York and elsewhere that suggest that overwhelming pressure was put on Bank of America's Ken Lewis to keep the deal to buy Merrill Lynch (ML) alive after Lewis and his due diligence crew were becoming increasingly uneasy about the financial health of ML.

There are some interesting documents supporting these allegations that can be found here .

Although there is undoubtedly a lot more to come out on this story it is fascinating how, despite all of the circumstantial evidence suggesting that Messrs Paulson and Bernanke were absolutely desperate to use any tactic to stop the unraveling of the financial system during those crisis filled weekends of last September and October, it is only when there is discovery - to use the quasi legal vernacular - of actual documents providing evidence of what purports to be a smoking gun confirming threats and intimidation, that the possibility of heads rolling, or at least some very awkward inquiries being instigated, begins to mount.

One can think back to the Watergate incident and Iran contra amongst so many others to get the flavor of the media's thirst for the minutiae of forensic analysis. Deep down all good journalists have fantasies of being like Agatha Christie's Poirot.

This story has the capacity to grow into something rather big and since Paulson is gone the main guy in the firing line would appear to be Ben Bernanke. Now that could really rock the boat

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