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Bank of America to Get Billions More From Treasury

The Treasury Department plans to invest billions of dollars in Bank of America to help the company absorb troubled investment bank Merrill Lynch, according to two people familiar with the matter, The Post's Binyamin Appelbaum reports.

The new investment, which is expected to be announced next week, is in addition to $25 billion the government already has invested in Bank of America, including $10 billion specifically in connection with the Merrill Lynch deal.

Losses at Merrill Lynch have outpaced expectations since the deal was announced in September. Bank of America had enough capital to support its own operations, but not enough to absorb Merrill Lynch's losses, the sources said.

The banks closed the deal on Jan. 1 after Treasury committed to making the new investment.

Bank of America and Treasury declined to comment.

-- Frank Ahrens
The Ticker is Twittering!

By Frank Ahrens  |  January 14, 2009; 6:52 PM ET
Categories:  The Ticker  | Tags: Bank of America, Merrill Lynch, Treasury, bailout  
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Comments

"Under certain circumstances, profanity provides a relief denied even to prayer.- Mark Twain


Posted by: morphylius | January 14, 2009 7:39 PM | Report abuse

The "Bank of America" formerly known and registered as the "Bank of Italy" is NOT an American Institution! It makes me ill to see these Wall Street scum bags collect US tax dollars - they should be flogged instead!

Posted by: NMremote | January 14, 2009 7:57 PM | Report abuse

I closed my accounts when they selected Cindy McCain to be the Grand Marshall of the Bank of America 500 at Charlotte (Lowes) Motor Speedway.
SCREW BOA.
HAVE FUN WITH MY TAX MONEY!
YOU'RE WELCOME!

Posted by: TOMHERE | January 14, 2009 7:57 PM | Report abuse

i dont want anyone to get a penny of taxpayers money but if a bank is going to get taxpayer money then they should be required to reduce their credit card interest from 25% down to 5%.

Posted by: infantry11b4faus | January 14, 2009 8:00 PM | Report abuse

Registered as the "Bank of Italy" in San Francisco, California, before 1906 ... it is an American Institution!

Posted by: ritha | January 14, 2009 8:28 PM | Report abuse

I’m afraid we are in the midst of a paradigm shift in American business. Economies are cyclical; therefore, the next time our financial system bubbles up, companies will position themselves for bailouts much like BofA has done. I wonder how they knew.

Posted by: musicalrecall | January 14, 2009 8:39 PM | Report abuse

One of my jobs in college and after college was working in branch banking operations for Bank of America (BofA), many years ago. My memory is that A.P. Gianinni started Bank of America as Bank of Italy, but changed the name after the San Francisco Earthquake and Fire of 1906. Most of the Banks assets were in gold. Right after the quake, he and his family hauled all of it out of downtown into the hills and this "capital" was used for loans to re-build San Francisco. NO FEDERAL BAILOUT, HERE!!!

BofA expanded into branch banking and insurance (TransAmerica), as well as securities. I was there during the Petersen, Clausen, Armacost and the second Clausen Administrations. During this time-frame, the bank's growth was enormous and was based upon solid growth and earnings. After the merger with Security Pacific National Bank (SPNB) the bank streamlined branches throughout California (they were head-to-head competitors and had branches in the same neighborhoods) and with the merger with NationsBank, based out of North Carolina, the BofA that I knew lost its soul.

If A.P. Gianinni was to see what has happened to the institution that he founded, he'd be really peeved, to say the least!

Posted by: Computer_Forensics_Expert_Computer_Expert_Witness | January 14, 2009 8:46 PM | Report abuse

BARF!

Posted by: isenberg888 | January 14, 2009 8:52 PM | Report abuse

I know the government is acting as a backstop to keep financial institutions afloat because it can not guarantee the losses it is supposed to in the event of default nor do they have the means or the resources to take over these institutions.
However, When are they going to fix the problem! by stopping Freddie and Fannie from doing business? yes that would hurt, but things are already hurting out here. We need stability and confidence. Throwing (fake) money out the window is only prolonging the inevitable. Make the maker of notes responsible, outlaw Arm's, CDO's reinact regulations Clinton Regan and others should not have signed. If things worked why did they need fixing?

Posted by: kenmeigc | January 14, 2009 8:59 PM | Report abuse

Why give them "more" bail out money, they knew it was coming, that's why they signed with Merrill Lynch to begin with. They got/get funds with ALL the "mergers", that's what they do....I spent 25 years watching it make a steady decline from a "marginal" bank to a really sad representation of America. I too withdrew all my accounts. It's depressing to have the name America associated with such a pathetic organization that is so completely ill managed.

Posted by: noel4140 | January 14, 2009 9:02 PM | Report abuse

view poll

Posted by: silahian | January 14, 2009 9:02 PM | Report abuse

And the public gets?

Posted by: neddelaney | January 14, 2009 9:11 PM | Report abuse

Dear Bank America,

Please take my credit card payment out of the billions of dollars you are getting from the U.S. Government.

Those are my tax dollars that are bailing you out, so let's just call it even.

PS, I don't give a d@mn about my credit scores. I buy everything with cash, I'm not buying another house, and the car dealers always give me good rates in January, because that is the worst month for car sales.

Posted by: kevinschmidt | January 14, 2009 9:13 PM | Report abuse

The City of Charlotte
The City of Wilmington Delaware
The City of New York
Me
and BOA
all say Thank You Tax Payers
Whoot!

p.s. The beat goes on STILL after 01/20

Posted by: thejibreelamonsters | January 14, 2009 9:46 PM | Report abuse

And BofA - MY bank - is charging me 29.99% interest?!?!?!? I think I'll give them a call tomorrow.....

Posted by: rn6700 | January 14, 2009 9:46 PM | Report abuse

So former Merrill Lynch shareholders (including its former management) get paid by BofA on January 1 for Merrill Lynch shares with the blessing of the Treasury.
Then on January 14 it is announced that Merrill Lynch losses are so high that BofA requires a capital injection.
How is this not legalized theft of taxpayer money to pay ML shareholders?

Posted by: sanjeevasingh_20001 | January 14, 2009 9:49 PM | Report abuse

Ah................Pure, unadulterated Socialism! And the rich get richer, the elite get more elite and the middle and lower classes get to pay the bills that their grandchildren will finally have to pay off. To say this isn't B.S. would be a crime in itself. At least the crooks in Congress and the White House are playing behind the curtains any more. They are right out in the open now and nobody's got the guts to shut this disaster down. The CHANGE is just what is going to be left to the rest of us.

Posted by: GordonShumway | January 14, 2009 10:02 PM | Report abuse


view poll

Posted by: silahian | January 14, 2009 10:03 PM | Report abuse

BoA was actually started in Charlotte, NC as Nations Bank which bought BoA.

Posted by: WhalerCane | January 14, 2009 10:08 PM | Report abuse

MY GODDDDDD~~

The level of criminality that exists now in shaking down the taxpayers to pay for the bad bets of these criminal banksters is STAGGERING...

It is as if we are being held hostage by financial terrorists, and the banksters are flying the plane completely.

I am so angry, I am going to pull all accounts that I have with BofA immediately.

I can support such TREASON!!

Posted by: misssymoto | January 14, 2009 10:21 PM | Report abuse

This is an outrage!!

PULL ALL MONEY OUT OF BofA!!!

It is the only power that we the people have left!!

Posted by: misssymoto | January 14, 2009 10:24 PM | Report abuse

One question:why don't they just give the money to WaMu and they can bail themselves out?

Posted by: dncthm1 | January 14, 2009 10:26 PM | Report abuse

And the band played on.

Posted by: dldbug | January 14, 2009 10:35 PM | Report abuse

But the fundamentals of the economy are strong! Stop whining.

Posted by: dldbug | January 14, 2009 10:41 PM | Report abuse

View my poll!!!
http://www.sissurvey.net/App/Polls/DirectPoll.aspx?id=78

Posted by: silahian | January 14, 2009 10:44 PM | Report abuse

Feeling pretty powerless here.Its like someone picking yr pocket and you cant do anything about it.The execs at Mer and Boa made billions in fake profits over the past decade,took home fat paychecks and big bonuses and we get left holding the bag. I wrote a nasty note to my senator but no ones listening. They just keep handing out the cash.

Posted by: snapplecat07 | January 14, 2009 10:45 PM | Report abuse

This is a SAD day for the United States when Treasury Secretary Hank Paulson bends over the American taxpayer to put it to em where the sun don't shine in order to take care of his own Wall street cronies and rogues.

Posted by: danglingwrangler | January 14, 2009 10:54 PM | Report abuse

Why are there not riots in the streets over this heist of the public treasury? The corporate hold up is simply amazing to watch. The first Bush presided over the raid of the treasury during the S&L scandals and now the son presides over the looting of the treasury by the Wall Street bankers. Simply amazing. And only in America is the public so cowed, so gullible, so complacent that this kind of thievery takes place right out in the open and they do nothing about it.

Posted by: curtisballs | January 14, 2009 11:03 PM | Report abuse

We have literally gone from a nation with a "very strong economy" to our government scattering like mice, trying to prevent Doomsday financial scenarios WITHIN A 9 MONTH TIME FRAME!!!

Think about this!! They feed us lie after LIE and wonder why trust has vaporized??!!!!

It's like the car has been stopped for speeding, and everyone is in the back seat!! Is anyone else aware that no one is driving the bus here?!!!


We must take back our country!!

We cannot allow our children's futures to be hijacked by criminal bankers.

Posted by: misssymoto | January 14, 2009 11:26 PM | Report abuse

"Just say No." Screw Bank of America AND Merrill Lynch. They're just thieves in pinstripes.

Posted by: mark46 | January 14, 2009 11:39 PM | Report abuse

As a point of clarification, Bank America was purchased by Nations Bank a few years ago the name of Nations Banks was changed to BofA. Kinda wonder what other favors BofA got from the govt for taking over Merrill and earlier from taking over Countrywide both of whom were failing.

Posted by: Jeff10 | January 15, 2009 1:04 AM | Report abuse

Let's get this straight. First we give BOA tax money to buy a failing company. Then we give them more tax money to support the failed company. Does the word grifter come to anybody else's mind? Send these rich beggers packing on thier corporate jets. Even a moron can see thru this scam.

Posted by: clamperken | January 15, 2009 1:25 AM | Report abuse

New rule: Bank of America can no longer charge $35 overdraft fees to the taxpayers keeping their sorry asses alive.

Posted by: mdh1984 | January 15, 2009 2:52 AM | Report abuse

Dear Bank of America,

Regarding the $500 I owe on my platinum plus Visa, I think I should explain something. You see, a couple months back, my friend invited me to partner with him on this snow-cone booth he bought last June and made a killing on in the summer.
But after September, sales started to go down for some inexplicable reason (must have had something to do with the economic collapse).

Anyway, my friend was in bad need of a cash injection and I thought 'what the hell, why not. Things are bound turn around in a month or two.' Sadly, this has not been the case. For some reason, nobody seems to want snow cones right now and it looks like I won't be able to pay you guys back.

I realize I made a stupid investment and for this reason there is only one common sense solution; forgive the $500 debt and give me an additional $2,000 line of credit for another investment I plan on making. Don't worry where the money is going. No point in having any oversight since I have no intention of paying you back, even if I end up turning a profit in the future. It's only fair.

Thanks for the understanding and for your exemplary business model,

MD

Posted by: mdh1984 | January 15, 2009 3:36 AM | Report abuse

I would be willing to have the Department of the Treasury CONSIDER this just as soon as the B of A provides the following, all under oath:

Statement (down to the closest dollar) for each of the following line items:

Amount already received
Amount of that received expended for
--providing credit relief to borrowers
--providing relief to home owners
--funding purchase of other banking entities (i.e., USING my money to put THEIR competition out of business)
--funding current salaries (of their incompetent and rapacious management)
--funding stock options (ditto)
--funding bonuses (ditto)

List of current board of directors, with current home addresses and valid email addresses

List of top executives and management, with current home addresses and valid email addresses

List of current or past Bush administration officials and employees who are currently employed by the B of A in any capacity

List of current or past Bush administration employees who have been OFFERED future employment.

Posted by: Va_Lady2008 | January 15, 2009 6:47 AM | Report abuse

I do believe the Bank of America was somehow tied in with the CIA and part of a scandal involving the Mafia, the Catholic Church, the CIA, and if I am not mistaken a factor in the Iran Contra arms for hostages, in which Ollie North and Bush Sr. showed their true patriotism by snorting at the Boland Amendment, destroying evidence that had already been ordered to not be touched. I can still see Senator Inouye, a much decorated hero of WWII, giving Ollie a lecture on the true meaning of being an American. And this from a Japanese descendant who truly knows and knew what being an American was about.

Posted by: deke4 | January 15, 2009 7:36 AM | Report abuse

"Bank of America had enough capital to support its own operations, but not enough to absorb Merrill Lynch's losses, the sources said."

Not no; Hell no! BofA knew they couldn't cover ML's losses, yet they still bought the brokerage? Bummer. No (more) soup for you!

Interesting that Paulson committed part of the second bunch of bailout money before it had been approved. With him overseeing the economy is it any wonder we're in the shape we're in?

5 more days. Just 5 more days.

Posted by: kemp13 | January 15, 2009 8:03 AM | Report abuse

I worked a Merrill Lynch for 4 years. It is my opinion, based on my experiences there, that this country would be better off without the Merrill Lynch corporate culture I came to know while working for the company. The Merrill Lynch I experienced was ripe with patronage and sick with pop culture ideals of what constituted leadership. It was a culture in which who one knew and whom one’s friends were, was far more important then what skills one brought to the corporation. It was a culture in which many who were void of talent, ability and ethics became decision makers. I based on my personal experiences, would let Merrill Lynch die. I believe America in the long term will be better off if “WE THE PEOPLE” cosigned the Bull and it waste products to the dust bends of history and bad memories.

Posted by: bloodiedbutunbowed | January 15, 2009 9:16 AM | Report abuse

I am a tax payer residing in New Jersey paying thousands of dollars each year. In 2008, I had to incur debt to meet my tax obligation.

Last October, due to financial difficulty, my wife and I submitted a formal request containing required financial statement, two recent pay stubs and so on ... seeking a mortgage loan interest reduction From Bank Of America in order to better meet our obligation. We were given the denial news over the phone by a BOA agent overseas. We have yet to receive a written explanation as promised. In addition, that information was used to freeze my wife BOA credit card.

Letting go of our home is not an option for we have three children. So, we bear the harassing phone call as we continue to pay late and incurring $400 fees in the process.

We, taxpayers, are the suckers. The well place government officials and the big banks share the loot.


Posted by: jdeli83 | January 15, 2009 11:26 AM | Report abuse

The working class have no recourse other than violence. If one or two CEOs of these banks, or a cabinet Secretary or a couple of Senators got shot over this issue - I guarantee these corrupt cowards might start caring what we think. Having the Dems on power isn't going to change anything either - who do you think made it possible for them to spend the money anyway that they want to? Barney Frank is chair of the Banking Cmte.

Posted by: cmayfi1 | January 15, 2009 12:46 PM | Report abuse

Also, who let the credit card companies charge us 29% interest and made it harder/impossible for the taxpayer to file for bankruptcy from credit card debt? Joe Biden sponsored the last Bankruptcy bill.

Posted by: cmayfi1 | January 15, 2009 12:49 PM | Report abuse

BOA has taken greed to a new level, remember their recent history, buying Countrywide and absorbing all of the criminal loans they made. Merely following Citi's example when they bought Argent. That worked out so well that Citi will not exist in 12 months. BOA then doubles down by buying Merrill. If they had waited 24 hours they could have just picked up the profitable parts as happened to Lehman. I am sure that there had to be pressure from Paulson with the subtle wink that the FED would cover losses. Enough, let em go and let honest money fill the void.

Posted by: tim24 | January 15, 2009 1:55 PM | Report abuse

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