Today's wires bring news that Bank of America (BAC) expects to pay bonuses close to 2007 levels. You remember 2007 - that idyllic time when most Americans had not yet heard of sub-prime mortgages and believed that their banks were sound, even if they weren't convinced that their banker was doing "God's work." Back in that hazy, distant past, Countrywide Home Loans was handing out mortgages like the touts in Times Square try to hand out flyers for cheap suits and comedy clubs. When the music stopped, Countrywide nearly went bankrupt and was bought by - yup - BAC. BAC then went on to buy Merrill Lynch and accept two waves of Federal bailouts (also known as "your tax money").

Quite a bit of drama, that. Stressful, no doubt. Merrill's boss John Thain was able to sooth his stress through a million-dollar office renovation paid for by shareholders. But what about the shareholders themselves? Well, dividends were reduced from $2.56/share annually to just 4 cents (down 98%), and the stock price plummeted from a high of $55 to a low of just $2.53 (down 95%). Now markets have revived, Wall Street bankers are humming "Happy Days are Here Again," and BAC's stock has recovered to $17 (down only 69%). So the bank wants to pay bonuses like the good old days. They claim that they need to "retain good people" and "keep quality employees" running their operation. Are these the same good people who brought the bank to the brink of bankruptcy? The same ones who cashed the Federal bailout checks? Maybe it would be best to let people like that find a situation where their "talents" could be put to better use.

Maybe the bank should consider a bonus for shareholders - raising its dividend. Don't hold your breath.


(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).