Morning roundup: Merrill losses hidden & Morgan knew of risk

Shareholders who were asked to approve Bank of America’s 2008 purchase of Merrill Lynch weren’t told about massive losses at the investment firm in the days prior to the merger. Instead, shareholders were told the merged entity would make money in relatively short order – when in fact, it required a massive taxpayer bailout.

Other unheeded warnings

Elsewhere in the world of people who cried wolf and were ignored, a group of JP Morgan stock owners sent word to executives about the need to beef up risk controls. Now that the company’s lost billions on those risk practices, officials inside are saying the suggested improvements will be implemented.

And, back office employees testifying that the MF Global hearings say the repeatedly raised red flags about the firm’s misuse of customer cash, but were blown off. Those hearings are expected to lead to criminal charges against some senior executive.

In London, the Financial Services Administration says it will begin spot checks of trading practices of City firms.

Portugal adds to Euro woes

Europe’s battered economic picture worsened this morning when Portugal cut its growth forecast. The 17-member economic zone last week saw its unemployment hit a record 11%.

In Spain, the government says it’s exploring centralized budget control, and currency traders in emerging market countries are unloading their Euros.

The piling on of economic bad news has leaders worldwide wondering if an attempt to pull together and reverse course for ailing economies will be effective.

Canada pushes petrol

In Europe, country that’s so far dodged the recessionary bullet is Poland. That country’s consumers have kept things humming.

Its North America counterpart is Canada, which has long credited its careful management of its banking system for staying afloat in tough times. Now, the Harper government is looking to sweeten the economic pill by making business conditions even friendlier for oil and gas companies.

Hear that currency markets? Elevator up for the Loonie.

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Enjoy your day, The Editors