Bank of America in talks for more taxpayer bailout funds

January 15, 2009 by · Leave a Comment
Filed under: Industry News 

This sounds like a story we have heard before.  Now BofA is coming back to the trough for some more taxpayer porridge.  Until we ween them off and let the cards fall as they may, we will continue to put our nation in more and increasing amounts of debt to bailout financial institutions that have been treating the markets like casino expect when the house wins, we lose.

News:

Bank of America, the largest U.S. bank, is close to getting billions of dollars more in federal support from taxpayers, a person familiar with the matter said on Wednesday.

As Congress debated the future of the government’s $700-billion financial markets rescue program, the source said that Bank of America has struggled to digest its January 1 buyout of former Wall Street brokerage giant Merrill Lynch & Co.

Merrill’s fourth quarter losses exceeded expectations and spurred Bank of America in mid-December to start talking to the U.S. Treasury Department, which is managing the bailout.

 

U.S. Treasury Secretary Henry Paulson was driving the talks out of concern that Bank of America might be unable to complete the buyout, cutting Merrill adrift, the Wall Street Journal reported earlier on Wednesday.

The size and terms of any aid that could result are still being finalized, with details expected to be announced with Bank of America’s fourth-quarter earnings, due out January 20.

In after-hours trading, Bank of America’s shares dropped more than 5 percent to the lowest level since 1991. During Wednesday’s trading session, Bank of America’s shares dropped 4.2 percent to $10.20, down 28 percent so far this year.

Bank of America declined to comment. The White House declined to comment on the original report in the Wall Street Journal, as did a U.S. Treasury spokeswoman.

Source: Reuters

 

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