(On November 24th this humble blogger suggested it was necessary that the Bank of America retrade with the insolvent 'blundering herd'.
On December 7th, Resistance is futile , retrade or die
Silly ol' me though I forgot a third option - go cry like a nancy capitalist to the Federales and have yet another taxpayer financed bailout for rich folks' bad speculative bets - AM)
By DAN FITZPATRICK, DAMIAN PALETTA and SUSANNE CRAIG
January 14, 2009
Wall Street Journal
WASHINGTON -- The U.S. government is close to committing billions in additional aid to Bank of America Corp. as the nation's largest bank by assets tries to digest its Jan. 1 acquisition of Merrill Lynch & Co., according to people familiar with the situation.
The discussion began in mid-December when Bank of America, already the recipient of $25 billion in federal rescue funds, told the U.S. Treasury Department it was unlikely to complete its purchase of the ailing Wall Street securities firm because of Merrill's larger-than-expected losses in the fourth quarter, according to a person familiar with the talks.
Treasury, concerned the deal's failure could affect the stability of U.S. financial markets, agreed to work with the Charlotte, N.C. lender on the "formulation of a plan" that includes new government capital. The terms are still being finalized, this person said, and details are expected to be announced with Bank of America's fourth-quarter earnings, due out Jan. 20.
Any possible arrangement might protect Bank of America from losses on Merrill's bad assets. There would be a cap on the amount of losses the bank would have to absorb with the federal government being on the hook for the remainder, according to one person familiar with the matter.
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