From Businessweek: Hold this truth to be self-evident: If in
the late ’70s, FM acts Styx, Kansas, and Foreigner decided to form an arena
supergroup, complete with a panoply of lasers and dueling keyboardists, they’d
have sold out world tours well into Iran-Contra. Try pulling off the same thing
today, however, and SKF & Co. would barely fill the auditorium at Staten
Island High.
Where am I going with this? Financial conglomerating, of
course. In earlier years, the notion of a Bank of America Merrill Lynch
superbank would have been darn near irresistible: all those ATMs, Merrill’s
famous “thundering herd” of brokers, permutations of cross-pollination.
Investors would surely pay a premium for that kind of franchise.
But now the era of the financial supermarket model is so
over—Citigroup (C) architect Sandy Weill just admitted as much—and BofA (BAC),
which has its hands full dealing with the ongoing hit of the subprime crisis,
isn’t exactly wowing investors with its ownership of the Merrill bull....
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