Bank of America

BofA employees can breathe a collective sigh of relief knowing they most likely won't get anything close to a bonus this year, and probably won't have jobs in a few months. If that's what they're concerned about, that is.

The banking giant has officially assumed $16.6 billion debt from Countrywide Financial, which was acquired in July for $2.5 billion. What a great buy high-sell low technique!

Not surprisingly BofA shares have dropped 53 cents (so far) today.

The news just keeps getting better and better. Bank of opportunity my ass.

Looking at maybe doing a merger arb trade on this deal. Spread is at nearly 18% today, up from about 12%, where it had been for a few weeks.

Anyone have any idea why? Any thoughts on this trade?

Had a first round on campus interview for Bank of America with some recent alums. Was told to wait but haven't heard back in 10 days. Just wondering if anyone's been invited to their superday.

This briefly came to mind when the merger was announced, but the curiosity has gotten the better of me, so I'm hoping the experts here can shed some light on this.

If some of you recall, FT (amongst others) ran an article in mid-August describing how Merill booked their credit derivative losses ($29B or so worth) though their UK subsidiary, where net losses can be carried forward to future years as a tax credit. (article here: http://www.ft.com/cms/s/0/369b723e-6a52-11dd-83e8-0000779fd18c.html)

After the merger, what becomes of this credit? (arguments against the validity of this accounting trick aside)

I'm assuming this will depend in part on the way the UK entity now fits inside the global corporate structure, something which I admittedly know next to nothing about right now.

Just a few weeks after announcing their takeover of Merrill Lynch, Bank of America has reportedly settledon an $8.4 billion dollar payout to clean up the mess made by Countrwide Financial Corp, which they acquired just a few months ago. Apparently the subprime lender got into some hot water with alleged predatory lending practices, and was sued by 11 states. Looks like the gem they thought they were getting is turning out to be a money pit of sorts.

I’m just wondering, with the big doings with Merrill, and now this massive lawsuit, does BofA have what it takes to keep their head above water? Or are we going to see another headline about a failed financial giant in a few months?

Well, I don’t know about you, but I know I’ll be able to sleep better at night now knowing Merrill’s John Thainwill being staying on after the BofA acquisition. He’ll be the new head of Investment Banking and is supposedly going to be the successor of BofA CEO Ken Lewis. I mean, who cares about the 27,000 employees rumored to be heading to the unemployment line in a few months? And that’s just at BofA. Who knows how many “little people” from Merrill will be sent packing. But, rest assured, one of the billionaire bigwigs is safe. I for one feel so much better.

Experts are estimating that with Bank of America’s recent purchase of Merrill Lynch, approximately 27,000 employees will be sent packing(nearly 10% of the total workforce). Although most of the slashes will be to back office operation reps, The Charlotte Observer reports that a decent chunk of those possibly heading to the unemployment line are the investment bankers, simply because Merrill has a better known name in the business. BofA is aiming for a savings of $7 billion, so BofA employees better brace themselves for what the grim future may hold.