Evaluating Merrill

Barron’s said BAC’s quest to buy Merrill should pay off for them and its investors if it is right about the credit crisis nearing a bottom. The combined company should be able to generate 6%-9% annual revenue growth and 10% eps growth on "the other side" of the financial crisis, Barron's quoted BAC CEO Ken Lewis. Lewis struck the $50 billion in stock deal with Merrill, believing that the U.S. is in a shallow recession and that the credit crisis is approaching a bottom. The report quoted Lewis as saying a true bottom will not emerge until the U.S. housing market begins to stabilize, which he expects in the first half of 2009. If Lewis' assumptions about loan performance and the economy are right, the deal should add to Bank of America's earnings by 2010