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That's the problem.

First of all that's an all-stock deal and didn't cost BOA a penny of cash. It jut didn't have the cash. 

BAC stock was down >20% this Monday on the news. That's the market's vote on the deal. Lewis and Thain first talked to each other on the Saturday and deal was reached on Sunday. Due delligence? What due delligence? Currently MBS markets are virtually shut down. That means there's no mark-to-market and I-banks can price their book value whatever they want - just as Lehman has shown us. BOA has no idea what it has bought.  Adding to the problem is the Countrywide deal, also invloving a garbage book of who-knows-what.

Why buy Merrill? Somebody from "high above" wanted that and applied certain pressure on BOA. Otherwise Merrill could fail. BOA has a little motivation, too: by acquiring one more big guy it may make itself "too big too fail". At the end of the day, though, the worst situation is now it makes itself too big to save.