Alright, let’s get into problem solving mode. Do we rescind the ML merger, for starters? There are accounts of just what a poor fit the two orgs are operationally trickling in from all over. BofA was never built to execute, but to grow. Big difference.

As we noted the other day, West Coast real estate continues to tank putting additional pressure on the loans BofA acquired along with Countrywide. Should the feds pro-actively try to find buyers for chunks of that portfolio? Is that what this “stress-testing” nonsense is supposed to do — provide cover for removing bad assets without declaring the bank insolvent?

What about the emotion and PR angle? Here’s the granddaughter of the original San Fran founder of BankAmerica blasting the “idiots” running BofA. Closer to home we have the remarkable “sickening collapse” editorial from the Uptown paper of record yesterday that reads like a letter from a jilted lover. The meat:

What a mess, and what a tragedy for Charlotte. In the span of less than a year, we have seen one of our two corporate giants swallowed and the other one brought to its knees. Wachovia and Bank of America were great companies that had grown for decades and shaped Charlotte as powerfully as any other single force. Their fall has wiped out billions in shareholder wealth, including considerable amounts for middle-class Charlotte-area residents. It has ripped apart families with layoffs. And it has rippled throughout our region’s for-profit and nonprofit sectors.

Some of this pain was unavoidable, given the breadth and depth of problems in the banking industry and the global economy. But it’s increasingly apparent that Lewis made a bad decision on the Merrill deal, and perhaps on Countrywide as well. Without those two deals, BofA would be struggling but would be in far better shape. … None of this is going to turn around quickly. The hole Lewis and his board have dug is too great. We can only hope that corporate leaders can unravel this debacle bit by bit, and eventually bring the company back to greatness.

A stunning turnaround from the space that just a few weeks ago was ready to hang John Thain and excuse Ken Lewis. Maybe reality does matter, after all.