In a move widely anticipated for months by many analysts, Meredith Whitney amongst others, Bank of America has finally cut its dividend. Releasing its earning report two weeks early, BofA said it would cut the dividend 50%. I view the move as much needed because BofA needs to start husbanding cash in order [...]

In case you missed it, the financial system in the U.S. is near collapse. This weekend was unbelievable. Lehman Brothers filed for bankruptcy. The world’s largest insurer AIG is looking for the Fed to help it avoid collapse and Merrill Lynch was forced to close a deal with Bank of America to save [...]

It has now been confirmed that Bank of America has bought Merrill Lynch for $44 billion.

Originally, Bank of America had been in the running to buy Lehman Brothers but balked at Lehman’s black hole of a balance sheet. The U.S. Government was offering no backstop for a Lehman purchase as it had for Bear Stearns.

Merrill shrewdly dialed up Bank of America, in fear for their own continued existence. They have been able to strike a deal – and at a decent price. Notch one up for John Thain.

Bank of America made a big mistake in buying Countrywide Financial — one that they will regret for years. Buying Lehman Brothers would have been even more disastrous given their exposure to Commercial Real Estate. But, this deal is good for several reasons. It is better for Merrill than BoA though, as it is a premium to book value and the current stock price.

Not every financial services sector company is a basket case destined for bankruptcy. There are many well-run lower risk organizations in the bunch. Moreover, let’s not blame the banking model for individual companies’ woes. The Economist had a good article this weekend highlighting the fact that it is not the universal banking model which [...]

The auction rate securities lawsuit bonanza is the gift that keeps giving for litigation attorneys. Bank Of America is the latest bank to be caught up in this dance.
Bank of America Corp., the largest U.S. commercial bank, said Thursday that it has received subpoenas and requests for information from federal and state government agencies [...]

Of all the merger decisions in the banking industry of late, BofA’s decision to back Countrywide Financial is the most risky. The fallout from Countrywide only gets worse day by day. I am astounded that this deal is on track. BofA Shareholders will regret it.
Bank of America’s Ken Lewis is trying to [...]

You kind of saw this one coming. Bank of America is crazy to take Countrywide Financial’s balance sheet onto its books. Apparently, S&P Equity Research agrees and correctly downgraded BofA to a sell rating because of the risk.
Note: Oppenheimer’s Meredith Whitney expects BofA to eventually be forced to cut its divided. [...]

It looks like the BofA-Countrywide deal is still on. In fact, BofA is making room for some of the Countrywide executives in its own executive suite. I reckon we will look back on this deal as a very bad call by BofA.
Bank of America Corp. has chosen several senior Countrywide Financial Corp. executives [...]