Bank of America propped up like Citicorp

The feds have gotten smarter about how they takeover failed banks. Indymac failed the old fashion way and Lehman Brothers went bankrupt. The feds engineered a fire sale for WAMU in a deal with JP Morgan and it went on the books as a failed bank. Since then, they have avoided the failed bank approach with Citicorp and now I believe with Bank of America. Its probably a good way to avoid panic but aren’t they hiding the true costs of the meltdown from the public and won’t we be surprised some day in the future when they total up the bill and come collecting? The Bank of Americas will have smart lawyers to avoid the tax bills that the rest of us end up paying. Here is the latest press release that sound pretty much the feds have put BofA on life support:

The U.S. government agreed to invest $20 billion more in Bank of America Corp. and guarantee $118 billion of its assets to help the lender absorb Merrill Lynch & Co. and prevent the financial crisis from deepening.

The government agreed to the rescue “as part of its commitment to support financial-market stability,” the Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. said in a joint statement shortly after midnight in Washington.

Bloomberg article

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2 Responses to “Bank of America propped up like Citicorp”

  1. Marcus Says:

    I think that Congress should pull the plug on Bank of America as unworthy of the bailout money.

    I have been with B of A since 1993. Last month I wrote them a nice letter asking to share the low interest rates they are enjoying with me and to lower the rate on my credit card.
    Friday I recieved three (3) letters from Bank of America, all dated the same day.

    The first letter said they had tried numerous times to call me (yeah, right) and had closed my credit card account and directed me to cut up the card. They were not lowering the rate either.
    The second letter told me they were sending me a response to my letter.
    The third letter was about maybe there are places out there to help me manage my credit card debt.

    So…that ends our 16 year relationship. My business put only one quarter of one million through B of A last year, but never again. And as the business grows, Chase gets it all…until now they only had half.

    Bank of America should have the entire Board and the top 500 or so officers dismissed as a condition for getting any more Federal Money. They are taking OUR money and backstabbing the consumers.

    Shame on Bank of America and Shame on Congress and the Federal Reserve!

    • Randy Wilson Says:

      Dealing with these banks is so frustrating particularly when we know they are getting lots of our $. I never had an account with BofA but I can say that bad customer service caused me to yank my business from WAMU a few months before they went belly. Wish I had been the cause but I doubt it.

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