Countrywide is the real problem at Bank of America
Now that the government has bailed out Bank of America, I want to remind you that this Bank is a serial acquirer and that the Merrill acquisition is not the only boneheaded move by Bank of America.
Bank of America is really the super-regional Nations Bank, also known as NCNB, that came of age in a bull market by buying its way into the big league. Nations merely put the Bank of America name on the front doors because that name has more caché.
And the real reason BofA went cap in hand to the U.S. government is Countrywide Financial. Don’t be deceived by the linkage to Merrill – that was just the icing on the cake. Countrywide is the institution founded by the same people that gave us Indy Mac. And they have tons of toxic loans on their hands – loans likely to sour even more given the problems in the state of California.
What I find surprising and absurd in all of this is that there have been no resignations at Bank of America. They have clearly destroyed shareholder value. Someone needs to take the fall.
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