Posted on 01/15/2009 10:39:43 PM PST by TigerLikesRooster
Bank of America to receive $138bn lifeline from US
Bank of America (BoA) has received an extra $20bn in US government funding and a guarantee back-stopping the losses on $118bn of its most toxic assets in the latest bail-out of a major US financial institution.
By James Quinn, Wall Street Correspondent
Last Updated: 6:31AM GMT 16 Jan 2009
The banking conglomerate had been in negotiations with the US Treasury about the fresh round of funding - which comes on top of $25bn received in October - since the middle of December, when it realised it woud have to brace itself for larger losses and write-downs as a result of acquistion of Merrill Lynch.
That deal, which was completed on New Year's Day, was agreed to on the frantic weekend on which Lehman Brothers filed for liquidation. However, BoA management, led by chairman Ken Lewis, soon realised that Merrill's fourth-quarter results were set to be far worse than previously expected. As a result, BoA management told the Treasury last month that it needed more capital if the deal was to go ahead.
The funding from the Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation, sees BoA receive a further $20bn of capital - in return for an 8pc annual dividend - on top of the funding guarantee, which is similar to the $306bn guarantee issued to Citigroup.
(Excerpt) Read more at telegraph.co.uk ...
Ping!
I wonder how long we’re going to keep putting our money down these rat holes?
Until a can of coke costs 10 bucks at Wal-Mart?
Or until both Coke and WalMart are chapter 11?
oMg! OmG! Are these people insane?
I used to get angry while reading stories like this.
Now I’m just thoroughly disgusted with it all.
Our country and economic system is increasingly looking like a partially dead flower. Rather than cutting off the dead and allowing the rest to grow, the gardener is sacrificing the living parts in a hopeless effort to save the dead. If done to an actual plant, I have a feeling what the end result would be...
So the American people are paying for all of BoA recent purchases. What do we get out of the deal?/
Foreclosures? Layoffs?
You get to be a millionaire (due to hyperinflation.)
Forget it sucker!!
If you're honest, hard working and pay your bills, you can expect a tax increase. Your property taxes will probably double first.
My guess is that Bank of America is going to need some more money from the feds in a few years at the very least. They also purchased Countrywide Financial, which gave out a TON of ALT-A and Option ARM loans in California. These are going to start recasting in a few short months, and we’re going to see foreclosures like mad.
In fact, I wonder if BoA purchased these assets in order to receive bail-out money. They get to look like the good guy coming in and saving these troubled institutions, and then they get federal bail-out money for it.
The federal paperpushers are doing fine. I’ve seen posts where they are supposed to add 600k ‘workers’ this year. Nice to be king.
"Bank of America (BoA) has received an extra $20bn in US government funding and a guarantee on taxpayer backs stopping the losses on $118bn of its most toxic assets in the latest bail-out of a major US financial institution."
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