The Journal has some amusing tidbits in its story on the Bank of America shareholder vote scheduled for today on its acquisition of Merrill Lynch.

Merrill brokers have teasingly mocked the “spirit points” that Bank of America managers dole out as an employee rewards. The points can be redeemed for golf clubs, televisions and such.

Methinks the Merrill folks these days don’t need to be laughing at the way anybody else does business, though that does sound like green stamps or something.

But what I’m wondering, and what the Journal doesn’t attempt to address, is why Bank of America shareholders would vote to buy a beat-up investment bank when its own shares have been hammered (down 57 percent) since the deal was announced. That Countrywide acquisition didn’t turn out so well, now did it?

And the paper still doesn’t tell us why it’s an okay idea for banks to get bigger and riskier by buying investment banks. Isn’t that one of the big reasons why Citigroup is in trouble?

I know the government is tickled to have somebody else bail out a company. But let’s face it: Banks the size of Bank of America and Citigroup are so large that they’re a threat to the economy. If companies are too big to fail, they ought to be whittled down until they’re not, not allowed to gorge on riskier businesses with black-hole balance sheets.

Anybody want to write a story on that?

UPDATE: Bloomberg has a better story. It notes that outside advisers favor a “yes” vote:

RiskMetrics and another proxy adviser, Glass Lewis & Co., both recommended that shareholders vote in favor of the deal. “The merger will strengthen both companies financially, yield approximately $4 billion in post-tax cost savings and improve growth opportunities for the banks,” Glass Lewis said in a report last month.

But it notes that Merrill has balance sheet problems that could backfire on Bank of America:

“There are some hand grenades on the balance sheet that are going to blow up on Bank of America,” said James Ellman, a former Merrill Lynch money manger who is now president of San Francisco-based SeaCliff Capital LLC. “The cost savings are going to be nowhere near what they’ve already promised.”

And it has more skepticism of the bank’s incessant dealmaking, something we at The Audit like to see:

“The companies he’s been acquiring all make sense strategically,” Ellman said. “But the timing and price almost always seems to be off.”
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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.