The Journal dominates the John Thain/Merrill Lynch/Bank of America fiasco story today.

Thain fired back at B of A yesterday, defending himself by saying the bank knew about his plans for Merrill bonuses and about its massive losses. But the Journal has lots of inside detail on what’s going on inside the companies, along with some plain old good analysis like this:

According to a securities filing last week, Merrill’s overall compensation and benefit expenses were down by 5.7%, to $15 billion in the year ended Dec. 26, from $15.9 billion a year earlier. The average Merrill employee got $247,423 in compensation and benefits in 2008, down just slightly from 2007.

By contrast, Bank of America employees got $75,577 in average compensation and benefits in 2008, down from $89,420 in 2007.

No wonder Bank of America workers are so ticked off:

When Bank of America announced Thursday that Mr. Thain had resigned, a standing ovation erupted on the bank’s equities-trading floor in New York. “It was like New Year’s Eve,” said one trader who joined in.

The jubilation was emblematic of a growing bitterness among Bank of America employees about the Merrill deal and the headache it is causing for the third-largest U.S. bank in stock-market value.

More good color:

Some Merrill employees are no less wary. When employees in New York are asked to visit Bank of America’s investment-banking headquarters in midtown Manhattan, some joke they are heading for the Death Star, the hub of the evil empire manned by Darth Vader in the movie “Star Wars.”

The paper also gets inside the boardroom, reporting that there aren’t any plans to fire Ken Lewis and adds this interesting bit about the clash of cultures and the pay issue:

The soap opera is likely to take another twist on Thursday, when many Bank of America employees find out how much they are getting in bonuses. The decision won’t be final until the bank’s board meets Wednesday.

But I think the Journal has been underplaying the revelations about Thain’s $1.2 million office redecoration—probably because CNBC’s Charlie Gasparino broke the story. In this story, the news that Thain said he will pay the firm for the expense is in the third-to-last paragraph.

Andrew Ross Sorkin of the Times is better on that here, (even if he tries to give a pass to Lehman’s Dick Fuld later in the column):

On Monday, Mr. Thain apologized for spending so much to decorate his office and said he would cover the costs. But the damage was done — and while he should be applauded for the gesture, the idea that he could try to buy himself some better P.R. seemed only emblematic of the larger problem. That commode — which, by the way, is a cabinet, not a toilet — may go down in the annals of executive gluttony along with L. Dennis Kozlowski’s $6,000 shower curtain.

The new reality is starting to slowly sink in. And it is not pretty. The celebrity financier has become the new celebrity villain. The switch is playing out on the blogosphere, where people have defaced pictures of Mr. Thain — adding horns and devilish tail — the way Perez Hilton’s celebrity Web site would mock Britney Spears’s body fat.

But the Journal’s story is a good look inside the turmoil at Bank of America.

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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.