Bank America To Get $15-20B More

(AP)  Bank of America and the Treasury Department are near an agreement that will provide $15 billion to $20 billion in new government support to the banking giant, a source close to the discussions said Thursday.

This source said that the injection of fresh capital will come from the government's $700 billion rescue fund and will be similar to assistance provided last November to Citigroup. The source spoke on condition of anonymity because the agreement had not been completely finalized. An announcement was expected later Thursday.

Bank of America will use the money from the rescue fund to help it absorb losses at Merill Lynch. The two sides were also discussing providing government guarantees against losses, with that money coming from a mix of government sources.

The Treasury Department already has pledged the first half of the $700 billion bailout fund which Congress approved on Oct. 3 to deal with the biggest financial crisis to hit the country since the Great Depression.

However, President Bush, on behalf of President-elect Barack Obama, asked Congress to release the second half of the bailout fund earlier this week and on Thursday the Senate voted 52-42 to turn aside an attempt by opponents to block the release of the remaining $350 billion from the bailout fund.

Before this week, Bank of America had received a total of $25 billion in capital injections from the Treasury bailout fund, called the Troubled Asset Relief Program, or TARP. That includes $10 billion for Merrill Lynch & Co., which Bank of America bought in a deal that closed Jan. 1.

"It gets down to the cost of the acquisition of Merrill and the risks associated with the deal," said Gary Townsend, president of Maryland-based private investment group Hill-Townsend Capital. "They were obviously in contact and in discussion with the Treasury prior to the end of year close."

Even with the government aid, Bank of America's stock has been pummeled.

Shares of the Charlotte, N.C.-based bank are down more than 27 percent this year - dropping to their lowest level in 18 years - and lost $1.80, or 17.5 percent, to $8.40 in late afternoon trading Thursday after trading as low as $7.35 earlier in the session. Rival Citigroup's shares plunged 87 cents, or 19.5 percent, to $3.66 after falling as low as $3.36 earlier in the session.

Bank of America declined comment on the new aid package on Thursday. Some analysts are predicting the nation's biggest bank by assets will report a loss or lower-than-expected earnings for the fourth quarter. Its board has already halved the company's dividend and could slash the payout again. It had been expected to report its fourth quarter results next Tuesday, but the bank moved up the release to early Friday.

"We don't know how they are going to be," said Bert Ely, a banking industry consultant in Alexandria, Va. "The question is can they handle the recognition of the committed losses, however bad they are going to be, if they are there."

Analysts polled by Thomson Reuters, on average, expect Bank of America to earn 8 cents per share during the quarter and $1.15 per share for 2008.

Fears about the stability of the financial industry had gripped Wall Street in recent days, sending stocks plunging. Wall Street investors are worried about another round of losses from banks, which had been especially hard hit by the worst financial crisis since the 1930s.

Against that backdrop, the federal government has taken radical steps - including making capital injections in banks - to shore up the nation's shaky financial system and to try to get credit flowing more freely again.

Problems, however, have persisted. Federal Reserve Chairman Ben Bernanke earlier this week made a forceful case that the second $350 billion bailout installment was critically needed.

In the Citigroup rescue late last year, the bank received a fresh $20 billion capital infusion from Treasury's bailout fund - after earlier receiving $25 billion - as well as government backing of billions of dollars in risky assets held by the bank.

Specifically, Treasury and the Federal Deposit Insurance Corp. provided a guarantee against the possibility of losses on up to $306 billion of risky loans and securities backed by New York-based Citigroup's commercial and residential mortgages. Funds from the FDIC and $5 billion from the bailout money would be used for the guarantees.

[stinginrich]

Bush and the Doomsday Compound

Are the Bush''s preparing a doomsday compound at the ends of the earth?




George W. Bush and/or George H.W. Bush bought hundreds of thousands of acres in Paraguay, adjoining a similar spread owned by the Unification Church''s Rev. Sun Myung Moon. Both massive parcels are hidden within a remote South American wilderness atop the world''s biggest freshwater aquifer adjoining a Secret U.S. Military Airbase. Oh, and there''s a special non-extradition law to protect the Bush/Moon families as they enjoy their old age and run drug/weapons smuggling rings, safe from American Justice. And they''ll own all the drinking water in the world.

[stinginrich]

Very Close to the end now......the entire Citizenry of America in the streets, Hungry, Cold, and Well Armed.....and looking for all these Azzholes.....

[lowell65-2009]

Treasury Secretary Henry Paulson says the government will no longer buy distressed mortgage-related assets, formerly the centerpiece of the bailout, and instead will concentrate on injecting capital into banks.

Treasury Secretary Henry Paulson is like having a fox in the hen house. Great choice for Treasury Secretary by the outgoing Bush Doctrine.

[lowell65-2009]

these sobs just charged me 25.00 for being one dollar over my credit limit which was lowered for no reason ..we are being ripped off big time by our own government and no one is doing anything about it...let them go bankrupt like everyone else..

I know how you feel. I once had a bad experience with them on a late fee charge and the branch mgr was responsible for setting up the wrong due date and Bank of America only gave me half credit on the late fee charge. Other Credit Card Providers would have given me full credit.

[bradkt1]

Bfore Bank of America gets one more dime, they should tell us exactly what they did with the last boatload of money that the texpayers gave them. Then we can decide if they should get any more. We shouldn''t be paying for corporate mergers and acquisitions...or for obscene private sector salaries so that bank officials can continue with their lavish lifestyles. This is what I suspect that they did wth the last money that we gave them...and why they refuse to tell us what they did with that money.

[fightfascism]

you''re right whitemale, the "trickle down" (like feces) proponents knew the end result of their little scheme would require them to be bailed out. who cares, they got theirs -it''s the american way.

[fightfascism]

consume: to eat up, devour entirely, to spend wastefully. "a nation of consumers" sounds to me like a bunch of suckers to be milked for the gains of a few.

[whitemale08]

It''s a British conspiracy because Reagan/Friedmanites knew beforehand that the end result of applying the advice of Lord John Maynard Keynes from Britain was bailouts for the banks.

They are not as stupid as they pretend to be.

Anyone who analyzes different economic phylosophy from these characters could see that ''free trade'' and ''globalization'' is just another PONZI scehme like Madoff.

Example: Ask a Keynesian what do you do after labor finishes the ''race to the bottom''?

A Keynesian will answer you: "Well eventually wages will rise once employers face a shortage of labor.

But that is not answering the question because if all of his customers are employees who earn too low of wages then the only option for the employer is to offer credit-derivative-swaps.

But then what happens when it''s time to pay back the employer and there''s no one to employ or customer to give credit to?

Keynesian has no answer because they will have to admit ''BANKRUPTCY''!

That''s where we are folks.

The system is bankrupt because we didn''t stick with the Hamiltonian American System of Credit exclusively for the ''development'' of the nation-state not consumption.

Hamilton will answer that the ''development credit'' given will be paid back once the ''development project'' is finished and is used by the next generation to build upon.

Keynesian wants credit for consumption but no way to pay back because there''s nothing left for the next generation since it was consumed.

[fightfascism]

b of a = commie traitor scumbags. come next election time, i hope this betrayal becomes an issue and an albatross around the necks of our sell-out politicians who favor this type of "oh well" system for big corporations and their schemes to game the system.

[fightfascism]

What???? these are the same commie *** who raised the rate on one credit card because i was accidentally late by a day on another card and then they wouldn''t negotiate or budge at all to correct the mistake. now they want even more of our tax money? NO WAY! screw these *** and their fee income, rip-off america til it breaks attitude. F b of a!!!!!!