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LESSON 1: Wealth Consolidation – Bank of America


11/13/2007 BofA to writedown $3 Billion in losses

“Bank of America Corp., the nation’s second biggest bank, said Tuesday it will take a $3 billion debt-related writedown in the fourth quarter and warned its losses could grow as the market wrestles with the fallout from the housing and mortgage-lending slump.”

1/11/2008 BofA acquires Countrywide for $4.1 billion using BofA stock
BofA now owns the homes of all of the Americans that have loans with Countrywide.

9/15/2008 BofA acquires Merrill Lynch for $50 Billion using BofA stock
BofA now advises i.e. determines the success of whom ever or whatever they advise their clients to invest in.

Following the combination with Merrill Lynch, Bank of America has become:
• The largest brokerage in the world, with more than 20,000 advisors and $2.5 trillion in client assets
• A leading provider of global corporate and investment banking services, including commercial lending, global high-yield
debt, global equity and global M&A
• A global leader in wealth management, private banking and retail brokerage
• A global leader in investment management, with approximately 50 percent ownership in BlackRock, which has $1.4 trillion in
assets under management, in addition to the $589 billion in assets under management with Bank of America as of June 30, 2008[/b]

11/2008 BofA gets first Bailout of $25 Billion from TARP funds
• $15 Billion for Bank of America
• $10 Billion that would have gone to Merrill Lynch

11/2008 BofA invest $7 Billion China Construction Bank

1/16/2009 BofA gets second Bailout of $20 Billion from TARP

2/6/2009 BofA CEO Lewis says nationalization is ‘absurd’

Earlier in the week Lewis spent almost a million dollars buying shares of his struggling bank and posted a memo to employees that said the bank’s board “unanimously endorsed our business model, strategic direction and the team,” at its regular meeting on Jan. 28.
Bank of America shares rose $1.29, or 26.7 percent, to close at $6.13 Friday, after falling to a 25-year low – or $3.77 – in trading Thursday afternoon.

“Investors believe that this bank is about to fail and be nationalized by the United States government,” wrote Ladenburg Thalmann analyst Richard Bove in a research note late Thursday.

He added those fears “make no sense whatsoever,” and he rates Bank of America’s shares a “strong buy.”
Lewis purchased 200,000 Bank of America shares for $958,340 on Wednesday, according to a filing with the Securities and Exchange Commission on Thursday. It’s the second time in recent weeks that Lewis has pumped his own money into the bank. Two weeks ago, he bought 200,000 shares for $1.2 million.

It is awfully convenient how the CEO is now able to buy up stocks at bottom basement prices in the company that he led down a path of failure. Moreover BofA now has more assets than before the “financial crises” – all the while using government money to accomplish it.

…it’s no wonder the board of directors sent out an internal memo that “unanimously endorsed our (BofA) business model, strategic direction and the team,” at its regular meeting on Jan. 28, 2009.

Truth is that which does not change.

Adam L Tucker

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