Monday, July 13, 2009

Bank of America and Regulators ---- Dig 2 Graves

Bank of America (BAC) continues to find controversy. Regulators now claim that Bank of America owes up to $4 billion in fees for a guarantee against losses at Merrill Lynch. The bank says the deal was never signed and certainly never used. Regulators say yeah but you guy’s benefited because everyone thought it was in effect.

So what we know with certainty is that there was great panic in the executive suite. The regulator and the bank were frantic and did not get their signals straight. The Lewis vs. Bernanke misunderstanding continues at a fundamental level.

The $4 billion is huge. Financial statements are all over the place but the $4 Billion is approximately double last years bottom line. Is this a back door bitch slap as regulators/Bernanke seek to embarrass Bank of America.

Maybe we need a sit down at a small Italian restaurant and just work this out. Or just dig two graves. The financial system needs to get this nonsense over with.