As home values continue to plummet and foreclosures continue to rise, the speculation on the proposed acquisition of Countrywide Home Loans, the largest and most troubled mortgage lender in the US, by Bank of America, the largest commercial bank in the US, has gotten to be a lot like the speculation on what Brad and Angelina are up to these days, and whether or not Brittany Spears in going to get her kids back or shave her head again.

After balking a few weeks back at assuming all of Countrywide’s bad debt (which would basically render the deal no deal at all), Bank of America recently came out and confirmed that yes, Houston, all signs are still ‘go’ at this point. The deal is set to close by the end of September. A lot could happen by the end of September. The way things are going, I’m kind of scared about what’s coming up this week: September? Will we have a September? Promise? Somebody promise me we will have a September and I’ll feel a lot better no matter what Bank of America does or does not do.

On the face of it, BOA’s planned acquisition of Countrywide makes instant sense and also seems completely insane. It makes instant sense because once the smoke clears and the housing market reemerges, Bank of America will be poised to suck in most of the money and most of the business, and then go on to sell all those new customers its other financial products like credit cards, deposit accounts, investments, car loans, and so forth and so on.

If Countrywide was the giant of the mortgage industry, Bank of America, by consuming Countrywide, will have the potential to become the Monster that ATE the Giant of the mortgage industry, once things are back on track. BOA will make Godzilla look like a punk kid.

Bank of America will be Megagodzilla.

The acquisition is completely insane because right now, not only is Countrywide hemorrhaging money from every financial pore, it is also the target of so many lawsuits: federal lawsuits, regulatory lawsuits, lawsuits initiated by its own stockholders, and who knows what else; that it can’t keep track of the trouble it is in any better than it kept track of its paperwork and underwriting and mortgage documents that got it into trouble in the first place.

Besides, BOA ALREADY makes Godzilla look like a punk kid. Bank of America already is Megagodzilla.

BOA will be paying $4 billion for the crippled lender Countrywide, a fire sale price to say the least, and maybe not a bargain at that. Lots of people want to see the deal happen because they think BOA’s sizable assets will shore up the tanking mortgage industry and keep people in their homes. I’d say this is a questionable assumption, especially that second bit. But say it does go that way and the day is saved: At what price has the day been saved? I think its a valid question, and one that isn’t being asked enough if at all.

It strikes me that the steadily increasing trend toward mergers and acquisitions in the financial industry can be arguably blamed for much of the unsteadiness (to put it kindly) in that same industry. When banks or lending institutions get that big, the emphasis comes to be more and more on quick and dirty profit, the money floats to the top tier of movers and shakers, and damn the existing customers.

The pressure on sales people at all levels in banking and lending is so enormous right now that they are practically told to break rules in order to generate profit, then blamed and fired if they get caught breaking rules they were pressured to break. So on the one hand, here’s your required one hour of training in banking and lending regulation along with all the 200 things you must never on pain of death do, and on the other hand, get out there and do all 200 and then some or you’re fired.

Meanwhile, frustrated customers waste hours on 1-800 customer service phone trees only to reach someone who knows nothing, has no authority to fix anything, and wants to shoot him or herself but can’t because that person knows the family would get charged for the headset post mortem.

I recently received this reply while asking about customer retention in a meeting, “Look, we don’t care about the customers we already have. We want new money and that’s all we want. If you can’t sell an existing customer something new then get them off the phone and move on. If you help one of them, then they’re all going to expect it.”

This was in response to me raising a concern about several customers who had pulled about a quarter of a million dollars each and gone to another bank due to poor service and uncaring attitudes.

Bank of America and Countrywide can get married if they want to–It’s a free country after all; freer every day in fact in terms of regulatory oversight; much freer than it has been since the early days of the laissez-faire capitalism and first industrial barrons like the Vanderbilts and the Carnegies.

Besides, when did the possibility of consequences ever stop anybody from getting married?

I personally would like to see a hard correction followed by a return to smaller commercial banks, much tighter mortgage lending regulations, and a sense that people matter more than profit margins.

Yeah, that’ll happen.