Quote:
Originally Posted by goof2
That is why I put the "by extension BoA" part. BoA was in good shape but they didn't buy Countrywide because it was a good deal, they bought them because the government begged (some allege threatened) them to. It was a horrendous deal and took BoA from being financially healthy to being one of the largest recipients of TARP.
Smaller banks haven't faired much better. This is a list of banks that have failed in the 2000s along with when they failed. Notice the list is almost exclusively small banks. There is no reason given for the failure of each bank but I think it is safe to say mortgages played a large role for the majority of them.
http://www.fdic.gov/bank/individual/.../banklist.html |
No...BOA bought Merrill Lynch under government pressure.
Countrywide was by choice and the long term gains outweighed the losses.
BOA was more than capable to absorb all the losses and captilize on Countrywides market presence.
When Merrill Lynch was in talks with BOA (initially) for a rescue it looked promising because Lewis was not happy with the performance of BOA's investment house for some time. Merrill had a lot of expertise to bring to the table. However once they looked closely at it they'd backed off. That's when the administration pulled their bullshit.
You have a point with small banks. I guess I was thinking more local banks like credit unions.