Financial Mergers May Be Mandated Rather Than Preferred

``The truth is that the carnage in the financial sector is coming to head whether the U.S. heads into a recession or narrowly escapes, the only thing that is going to save these is actual mergers. We think that Fed and Congress would be extra lax on any predatory acquisition if it keeps a major institution from failing.''

We would certainly classify any potential BAC/CFC merger as more compulsory than "preferred" at this point; but we're at a loss to explain how the Fed or anyone else is going to compel or motivate any other mergers to bail out collapsing companies packed to the brim with toxic waste. More likely for the big losers is receivership or some other form of "nationalization-lite" and sell-off piecemeal.