I’m positive he is correct.
I wrote a blurb the day BoNY/Mellon announced it didn’t want people’s money to deposit (which would force them to raise their own capital requirements)… and as part of that looked and contrasted that bank with BoA
Bank of America is solvent in fiction only. They have this huge problem that they thought they wanted to buy Countrywide Mortgage, and when they realized what a huge mistake they were about to make and wanted to back out, the Powers that Be in DC demanded they go through with the deal or face a government seizure.
The scope and size of the fraud in that portfolio (not to mention the non-fraudulent loss of equity in the loans in California) is something BofA just can’t swallow. They’re staying liquid by borrowing short term money from other banks and the Fed, not by attracting deposits. The FDIC has nowhere near the resources to buy it out, but way too many people (yours included) have all their day to day banking tied up at BofA. It can’t cease operations, yet no other bank is going to be able to or want to merge with them.
So Warren Buffett (Y’all little people should pay more taxes) ponied up $5 billion to jump to the head of the line buying preferred stock and infusing $5 billion into BofA. He’s counting that when Tim Geithner and his $4 trillion slush fund come to the rescue, Buffett will be first in line with his hand out.
I’m thinking that Meester Boofay, good friend, supporter and financier of The Bawmaw, opened his purse to help his arse-naif president bail out BofA without the crap storm that using taxpayers’ dollars would have set off. I’d bet that Boofay has a sweet, can’t-lose kinda deal going on, the kind that comes from on high celestial connections and guarantees. God, how politics makes me wanna puke.
Mmmmmm sounds like a little “insider trading” on Buffets part perhaps ? Bank analyst Glenn Shorr says Buffet is BofA’s White Knight. sounds a little more like brown-nosing the chimp Obonzo and Geithner to me .