[gondramB]

>>Bank of America shares fell as much as 28 percent — dropping to their lowest level in 18 years — on news that the bank may seek another capital injection to manage losses from its takeover of Merrill Lynch.<<

This one particularly stinks - bailing them out not because of economic conditions but because they paid too much for a brokerage.

[expatpat]

They agreed to take over ML and its CRA cr*p at the request of the govt., so the extra bailout money is perhaps only fair.

[Pearls Before Swine]

This one particularly stinks - bailing them out not because of economic conditions but because they paid too much for a brokerage.

That may be the case. But, there have been some news items stating that, before the deal was done, BAC went to the Fed (or Treasury, I'm not sure) and said that they might need backstopping, because Merrill's book was tanking worse than they had bargained for, and if they didn't get it, they would scotch the deal. In that case, the Fed/Treasury's desire to get someone behind Merrill may be a key factor, and now their private guarantee is coming due.

I hope we find out the whole story soon.

[gpk9]

"This one particularly stinks - bailing them out not because of economic conditions but because they paid too much for a brokerage."

I have a feeling Merrill isn't the problem. The portfilio isn't that big. It's way more likely BoA is having (more) problems with THEIR investment portfolio, as in more writedowns in THEIR portfolio.