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Bank Of America Hilarious Denial #2

Tyler Durden's picture


This is just hilarious: According to Bloomberg, Bank of America’s main hesitation was taking Warren Buffett’s money when bank had said it didn’t need capital, CNBC reports without saying where it obtained the information. It adds, the symbolic value of investment worth boost to confidence; "$5b not lot to raise" - also apparently "Terms better than public market." Here is our retort: Bank of America could have told Buffet: "No thank you" and leaked it. Instead it confirmed what Zero Hedge has been saying since October 2010 - that it is absolutely desperate for capital. Also, as to the saying that "terms were better than the public market" - why of course they are - the bank has absolutely no access to the public market. BAC IS LOCKED OUT! But at least we will soon see just how efficient Dodd-Frank's bank insolvency contingency is in real life. Because we have a feeling the brilliant legislation penned by Barney Frank and Countrywide's senator, may fall just a little short...


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Thu, 08/25/2011 - 12:42 | 1600107 eisley79
eisley79's picture

bancorruptcy bitchez

Thu, 08/25/2011 - 12:49 | 1600153 nope-1004
nope-1004's picture

Tyler, you don't expect a criminal to tell the truth, do you?

The shoe fits the BACrupt.  White-collar-criminals.


Thu, 08/25/2011 - 12:53 | 1600197 spiral_eyes
spiral_eyes's picture

bank of america not bankrupt?

in related news, steve jobs return to apple to accounce ipad3

Thu, 08/25/2011 - 12:54 | 1600202 gmrpeabody
gmrpeabody's picture

This all just too funny.

Keep them squirming, Tyler.

Thu, 08/25/2011 - 13:54 | 1600597 OutLookingIn
OutLookingIn's picture

Open your eyes!

Monday: Buffet talks to Obama.

Tuesday/Wednesday: B of A looks like collapse.

Thursday (early): Buffet announces $5 billion preferred stock deal with B of A.

Thursday: Immediately following Buffet announcement, the White House announces a plan to bail out distressed residential mortgages, of which B of A is loaded with! Jimmy gets to chow down at the tax table, compliments of Obama and whats left of the middle class. Oh, and don't forget, Buffet is hosting a $35k plate fund raiser for Obama in NY.

B of A gets a life line. Buffet gets free tax payer money. Obama rides to the "disteressed" home owners rescue. And the middle class gets presented the bill! Isn't that wonerdful? (sarc off)  

Thu, 08/25/2011 - 17:34 | 1601743 A.W.E.S.O.M.-O 4000
A.W.E.S.O.M.-O 4000's picture

Ain't free market capitalism cool!

Thu, 08/25/2011 - 12:42 | 1600110 PaperWillBurn
PaperWillBurn's picture

Closing in the red, bitches

Thu, 08/25/2011 - 12:51 | 1600182 GiantWang
GiantWang's picture

I am praying to the stock market gods for that . . . .

Thu, 08/25/2011 - 12:42 | 1600112 espirit
espirit's picture

X 2

Thu, 08/25/2011 - 12:43 | 1600116 Cognitive Dissonance
Cognitive Dissonance's picture

BAC farce meet BAC reality.

Ouch, that's gonna leave a mark.

Thu, 08/25/2011 - 13:04 | 1600284 Cognitive Dissonance
Cognitive Dissonance's picture

Warren just failed as a BAC fluffer.

Thu, 08/25/2011 - 13:15 | 1600346 hedgeless_horseman
hedgeless_horseman's picture

There is no dilution like preferred dilution, especially at a discount to par.

Thu, 08/25/2011 - 13:48 | 1600550 Kayman
Kayman's picture

Let's see.... Aw Shucks, Uncle Warren bought $5 billion of Goldman, "proving" the Giant Squid didn't need it.

1. $13 billion taxpayer money slipped to the Squid through AIG.

2. Cobbled together access to Fed funds in the tens of $billions for the Squid.

Yeah, sure... everything is peachy at BAC

Thu, 08/25/2011 - 12:43 | 1600117 lolmao500
lolmao500's picture

BAC needs a whole lot more than 5 billion.

Thu, 08/25/2011 - 12:59 | 1600245 Almost Solvent
Almost Solvent's picture

Maybe, but this should last them through the end of August . . .

Thu, 08/25/2011 - 13:09 | 1600312 lolmao500
lolmao500's picture

Yeah a week... and then what? Obama bails them out?

Thu, 08/25/2011 - 12:43 | 1600118 laomei
laomei's picture

welp, time to suck that last client payout out of bac and then close the account for good.   lets see how long that 5b lasts.

Thu, 08/25/2011 - 12:43 | 1600120 UGrev
UGrev's picture

Is the part where say to the dying man that he's going to be ok just before he fucking dies an agonizing death?

Thu, 08/25/2011 - 12:55 | 1600210 pods
pods's picture

"You can hack it Cowboy."


Thu, 08/25/2011 - 12:57 | 1600224 Miss Expectations
Miss Expectations's picture

Alternatively, this is the part where the horrifically wounded BAC asks if it is going to die and Uncle Warren says, "not today."

Thu, 08/25/2011 - 12:59 | 1600241 JPM Hater001
JPM Hater001's picture

If by dying man and aganozing death you mean Buffet when he realizes his left wing ideology of "everyone rich should pitch in MORE" translates into a $5 billion loss and it is his stroke, triggering a massive corinary followed by falling down the lobby escalator at BAC only to crack his head open and watch his own brain ooze out before him....

Then no...This isnt that part.  Or is it?

Thu, 08/25/2011 - 12:44 | 1600125 Missiondweller
Missiondweller's picture

When will the equity market wake up! It is 2008 all over again but worse.

Thu, 08/25/2011 - 12:46 | 1600127 Gandalf6900
Gandalf6900's picture

BAC to the future (for about 20 minutes) then streight BAC to reality


Thu, 08/25/2011 - 12:45 | 1600132 H H Henry P P P...
H H Henry P P P Paulson's picture

All the headlines recently have been saying "this is nothing like 2008".

That's why this Sept/Oct will be exactly like 2008.

Thu, 08/25/2011 - 12:48 | 1600170 Boilermaker
Boilermaker's picture

reverse reverse psychology! It's a mutha!

Thu, 08/25/2011 - 12:45 | 1600134 doomandbloom
doomandbloom's picture

am actually loving the updates of ZH and Banzai on Twitter...hilarious...


that dickhead Roubini...still fighting one listening to him anymore...

Thu, 08/25/2011 - 12:50 | 1600135 cowdiddly
cowdiddly's picture

Um, now might be a really good time to ask for your money if you have a BAC acct. Better beat the herd.

Suck it up Munger. LOL 

Thu, 08/25/2011 - 12:46 | 1600146 espirit
espirit's picture

Wonder if Buffet knows the feeling to hold sub-prime slime?

Au Natural.

Thu, 08/25/2011 - 12:46 | 1600148 alexwest
alexwest's picture

wow ,, i guess 5 bln are not what it used to be anymore..

probably  bought couple more days...



Thu, 08/25/2011 - 12:46 | 1600149 Boilermaker
Boilermaker's picture

I'd love to know if Warren took out a 0% no-recourse (naturally) loan from Uncle Ben to buy $5B worth of senior, preferred, and 6% dividend shares.

Thu, 08/25/2011 - 12:46 | 1600151 spartan117
spartan117's picture

Bank of America has FOUR office towers in Pasadena (Corner of Lake and Colorado) that are all mostly empty.  A few of these were taken over from Countrywide.  Good luck finding tenants for those properties. 

Thu, 08/25/2011 - 12:48 | 1600167 centerline
centerline's picture

A few years before the financial crisis, I used to point out how all the major towers had bank names on them... and how it was pretty clear we are screwed at some point.  I had no idea at that time the depth of those waters.  Nonetheless, the writing was on the wall for all to see.  Every skyline shouted out "who's your daddy, bitches."

Thu, 08/25/2011 - 12:57 | 1600226 pods
pods's picture

I actually tell that to people.  In every city the largest and most opulent buildings are invariably banks.  That should tell you where all the money goes.


Thu, 08/25/2011 - 13:03 | 1600263 Almost Solvent
Almost Solvent's picture

Here in Rochester (NY) it's the KODAK building.


Not exactly a bank, but just as fucked and mostly empty.


There is talk about moving the local community college into the unused portions of the building. Still has a ( now unused) cafeteria to serve upwards of a thousand people at a time.

Thu, 08/25/2011 - 13:08 | 1600303 pods
pods's picture

Feel sorry for Rochester, and Buffalo.  Grew up in around Bingo.  Empty IBM buildings galore in Endicott.

Genny Red Eyes I miss.

Whenever we head back to upstate it is sad how bad it has gotten.  People in Bingo seem like they had the life sucked out of them.  Which, when I hear about property taxes, etc, seemed pretty valid.

Still miss the smallmouth and muskie fishing though.


Thu, 08/25/2011 - 13:28 | 1600427 sid farkas
sid farkas's picture

Ha, grew up north of Syracuse, hard to imagine it used to be a nice place. Allied Chemical, Carrier, Crucible Steel, ... all gone.



Fri, 08/26/2011 - 00:22 | 1602949 StychoKiller
StychoKiller's picture

Ya wanna make money in Las Vegas?  BUY a casino!

Thu, 08/25/2011 - 12:46 | 1600154 centerline
centerline's picture

I hope ZH has a contingency plan in place.  Poking the 900 lb gorilla is at some point going to get some serious attention.  Bravo ZH.  Rock on.  The truth is a bitch, isn't she?

Thu, 08/25/2011 - 23:41 | 1602862 TruthInSunshine
TruthInSunshine's picture




Truth is the cleaner.

Thu, 08/25/2011 - 12:47 | 1600157 Earl of Chiswick
Earl of Chiswick's picture

funny, Tom Brown had the exact same talking points (symbolic) on  Bloomberg this AM 

as BAC approaches Uncle Warren't strike price

Thu, 08/25/2011 - 12:57 | 1600225 Argonaught
Argonaught's picture

"Uncle Warren't"...typo or pun?  ;)

Thu, 08/25/2011 - 12:47 | 1600158 tawdzilla
tawdzilla's picture

i smell blood in the water

Thu, 08/25/2011 - 12:47 | 1600163 lieutenantjohnchard
lieutenantjohnchard's picture

and there are those who will mock, deride, laugh at, scorn and ridicule those of us who have said nyet to the paper parlor games in favor of the real mccoy - gold and silver.

hat tip to all brave souls who insist on playing the paper games. you've more guts than a skydiver.

Thu, 08/25/2011 - 13:42 | 1600524 goldm3mb3r
goldm3mb3r's picture

I second that. However I am forced to play the paper game with my pension that i will have no access to for 20 years. Have is all in Au and Ag ETFs and PM mining stocks - I wonder if I will see any of it?

Thu, 08/25/2011 - 12:48 | 1600165 Jim in MN
Jim in MN's picture

If BAC is really going down the toilet, this little footsy play from Warren is already gone...pfft...into the hole. 

Look for the deficit ceiling to be reached and BAC to really fail in the fated month of October. 

What do you bet Warren has his cocktail napkin with 'IOU 100+50 % --Tim and Ben' jammed into his jacket pocket at Jackson Hole even as we sit n spin about all of this....

Thu, 08/25/2011 - 12:49 | 1600172 LynRobison
LynRobison's picture

Now is probably not a good time to own bank stocks. Owning shares of a gold/silver depository in a state such as Minnesota, Utah, Virginia, North Carolina, Idaho, etc., would be much better. (

Thu, 08/25/2011 - 12:51 | 1600185 PaperWillBurn
PaperWillBurn's picture

Why take on counter party risk? Get physical.

Thu, 08/25/2011 - 12:49 | 1600175 JW n FL
JW n FL's picture

Countdown with Keith Olbermann 08-19-2011 2 - S.E.C. No Evil, with Matt Taibbi


No Worries! The S.E.C. is watching Bank of America VERY CLOSELY!!


Thu, 08/25/2011 - 12:58 | 1600211 JW n FL
JW n FL's picture

<----------- Law Enforcement is a Fucking JOKE! in this Country!!

<----------- Law Enforcement is NOT! controled by Government Lobby Whores and is doing a GREAT! Job!!


We have more F.B.I. / S.E.C. / add other three letter group of idiots who are bought and Paid for Lobby Whore Lacky's!!!

than there are members of the same groups investigating Wall Street!

we need a better Lobby for ZeroHedge!

ok.. Tyler lets pass the hat so that we can BRIBE.. Oops, I mean Lobby the S.E.C. to look the other way in any and everything we do here!

HEY! F.B.I.!! YOU! ARE!! A!!! FUCKING!!!! JOKE!!!!!

Vote with a Bullets!! Help take America back from the Lobby Whores who OWN Law Enforcement!!

James Workman

@JWnFL Palm Beach, FL / Spanish Cay



Corporations Own the Lobby!


The Lobby Owns the Government!


Law Enforcement works for the Duly Elected Lobby Whores!


We the People = Screwed!!/JWnFL


Thu, 08/25/2011 - 13:06 | 1600301 espirit
espirit's picture

Uh Oh, black helicopters on the way to visit you and I don't think it's Ben dropping hundreds.

Thu, 08/25/2011 - 13:20 | 1600381 Miss Expectations
Miss Expectations's picture

You remind me of Gary Sinese on top of the mast yelling, "you call this a storm?"

Anyway, I would guess that any whistle blower who contacted the SEC didn't shred their files.  The original files are probably in vaults all over the country.  Now, if there were only a reliable investigator who could re-investigate (William Black working privately perhaps?)  Remember, the investigations never got past the initial stages and it's the copies of the info that the whistleblowers sent in that was shreaded.  I believe that many cases can be re-assembled.

Thu, 08/25/2011 - 12:49 | 1600178 topcallingtroll
topcallingtroll's picture

I want to watch BAC die a horrible death. Should be very entertaining watching the hilarious denials.

"Tis only a flesh wound."

Thu, 08/25/2011 - 12:50 | 1600179 Confused
Confused's picture

hahahahaha. Someone got paid for that response.

Thu, 08/25/2011 - 12:52 | 1600187 Catullus
Catullus's picture

I know some claim that LIBOR is bullshit, but you have to actually prove that. Otherwise seems like they gave Buffett 20x what they could have secured in the market. Yes, they're locked out. But that means LIBOR is illiquid at this rate.

And it does matter, everyone's corporate variable interest rate debt is based on it. Which means CC- TXU gets a better rate than BAC. Broken market indeed

Thu, 08/25/2011 - 12:54 | 1600207 TruthInSunshine
TruthInSunshine's picture

LIBOR    IS   BULLSHIT when central banks are pushing the yield on the primary competitor to private bond and bond equivalents, to wit, sovereign bonds, artifically lower (through programs such as QE).

These are broken markets all around, and Bernanke is public enemy number 1 in breaking them.

LIBOR is artificial, because Bernanke (and now Trichet and the BOJ) have used monetary policy to hammer yields down far lower than where market forces would have set them.

Thu, 08/25/2011 - 13:05 | 1600292 Catullus
Catullus's picture

I agree. But if LIBOR doesn't rise, then the banks are just decapitalizing themselves all over again. Twist has squeezed them of capital. It doesn't matter if the Fed executes Twist. They're still borrowing high and lending cheap.

Thu, 08/25/2011 - 12:54 | 1600201 Archimedes
Archimedes's picture

BAC only up .43 cents as of right now. Bets on if it closes negative?


Thu, 08/25/2011 - 12:54 | 1600205 Doyle Hargraves
Doyle Hargraves's picture

This should hasten the demise of those bastards at BAC and teach mr buffet a lesson as well, about (worthless) paper, (physical)gold, and (the ponzi)america! Don't choke on those preferred shares Berkshire bitchez!

Thu, 08/25/2011 - 13:46 | 1600543 goldm3mb3r
goldm3mb3r's picture

And he sold his silver.

Thu, 08/25/2011 - 12:55 | 1600212 Vergeltung
Vergeltung's picture

this kind of web-journalism is what makes ZH so great. you can't find this kind of contrarian fact finding in many other places. truly empowering, IMO.

Bravo TD.


Thu, 08/25/2011 - 12:58 | 1600238 GoldmanSux
GoldmanSux's picture

700 million warrants. 7% of shares O/S. The CEO is desperate. He's got to go.

Thu, 08/25/2011 - 12:59 | 1600244 youngman
youngman's picture

That 5 Billion is just to pay off the Nebraska AG....and for nothing else..

Thu, 08/25/2011 - 13:00 | 1600255 rgd
rgd's picture

Go long America, bitchez!

Thu, 08/25/2011 - 13:01 | 1600260 caerus
caerus's picture

s&p says BAC rating unaffected by buffet deal

Thu, 08/25/2011 - 13:01 | 1600264 azzhatter
azzhatter's picture

Even the assclown pumpers on CNBC are calling the fraud out on this one. If Moynihan didn't need capital why didn't he tell Buffett he can buy on the NYSE. These two deserve each other Uncle Fraud and Junior Fraud

Thu, 08/25/2011 - 13:02 | 1600265 Irish66
Irish66's picture

S&P no help to bac

Thu, 08/25/2011 - 13:02 | 1600266 Irish66
Irish66's picture

S&P no help to bac

Thu, 08/25/2011 - 13:04 | 1600281 JW n FL
JW n FL's picture

wrong page! my bad sorry!

Thu, 08/25/2011 - 13:11 | 1600322 Seasmoke
Seasmoke's picture

no one respects Moynihan......this will just quicken BOA demise

Thu, 08/25/2011 - 13:12 | 1600330 mendigo
mendigo's picture

+1 to ZH

status quo is sucking wind

isn't BAC really a conglomeration of failing banks from years past?

Thu, 08/25/2011 - 13:14 | 1600340 mantrid
mantrid's picture

Because we have a feeling the brilliant legislation penned by Barney Frank and Countrywide's senator, may fall just a little short...


ok but that means more liquidations on the horizon; temporary gold plunge as more bullion supply comes from nowhere from HSBC vaults of GLD..?! correction might be a bit deeper..?!


(yes I know in the long term Au & Ag are the winners)

Thu, 08/25/2011 - 21:26 | 1602410 Money 4 Nothing
Money 4 Nothing's picture

Spoils of war from Libya, they were sitting on tonage, but not now. Search it.


The Bad Guy...

Thu, 08/25/2011 - 13:14 | 1600342 Joebloinvestor
Joebloinvestor's picture

BAC-PL (B of A preferred) pays a 7.5% div on a strike price based on $1k.


At the price Buffet paid he is making an almost 9% on investment.

Thu, 08/25/2011 - 13:17 | 1600358 defn8Dog
defn8Dog's picture

Sine wave: amplitude and frequency of BAC denials is increasing.

Thu, 08/25/2011 - 13:26 | 1600414 PulauHantu29
PulauHantu29's picture

Who takes over BAC this weekend when they might follow the path of WaMu and Lehmans.......who?

Thu, 08/25/2011 - 13:31 | 1600451 Perpetual Burn
Perpetual Burn's picture

Love how they say Buffets "investment" hahahha

Thu, 08/25/2011 - 13:37 | 1600464 Die Weiße Rose
Die Weiße Rose's picture

Warren Buffhead, that senile and decrepit old weapon of apocalyptic misconstruction needs to come up with another 180 billion to save BAC, and more to survive those billions in long derivative contracts,while betting on a recovery around the time of Lehman on nothing but hopium and Bullshit...

(BAC - crap) to hear the Oracle of Omaha please pull this chain twice !

Thu, 08/25/2011 - 13:34 | 1600476 jmc8888
jmc8888's picture

(rhetorically) If Glass-Steagall is worth a bar of gold...what's Dodd-Frank worth? One BAC share.

Thu, 08/25/2011 - 13:39 | 1600510 meritocracy
meritocracy's picture

Stay away from BAC.  They have a country-wide stance.

Thu, 08/25/2011 - 13:53 | 1600578 Downtoolong
Downtoolong's picture

From an MSNBC article:

Buffett called Bank of America Chief Executive Brian Moynihan this week and offered to make the investment ….. the deal was negotiated and consummated in a couple of days.

Funny that a bank which doesn’t need capital would cut a deal on such short notice with an outside investor without consulting existing stock holders first; particularly since the deal gives Buffett a much sweeter position than what existing stock holders have.

Desperate much? Either that or just blatantly irresponsible.

Anyone who studies Berkshire’s history knows that it grew by essentially feeding on helpless corporations when they were down and dying. That has been Buffett’s business model from day one. It’s predatory capitalism at its finest. I’m not saying it’s right or wrong; just recognizing a vulture what it is.

Thu, 08/25/2011 - 14:09 | 1600693 giddy
giddy's picture

All that's left to watch for are the bubbles...

Thu, 08/25/2011 - 14:13 | 1600736 Segestan
Segestan's picture

I bet Buffet never spent a dime on BA. The Feds just needed a front man , with a giant ego, to give BA 5 billion. Buffet isn't stupid enough to actually spend 5 billion.

Thu, 08/25/2011 - 14:20 | 1600790 Jovil
Jovil's picture

Living through a currency devaluation and how to cope

I was managing an American subsidiary of a successful large US Company in Mexico. It had been a financial turnaround for our team. Cash flow had accumulated in our bank in Mexico and corporate didn’t want the money repatriated to the US. Although we had already paid a 35% income tax to the Mexican government, we would have to pay an additional 30% exit tax to repatriate the money. In addition, we would have to pay high fees for the peso/dollar exchange, in order to make the transfer. The company wanted to expand our successful business and so we decided to keep the money in Mexican pesos to be used for further expansion.


One morning, as my wife and I were on a trip driving on the highway, we heard a national message from the President of Mexico in 1976, Luis Echevarria, one of the most corrupt presidents in Mexican history. “It is a lie that we are going to devalue the peso,” he said.

Read more

Thu, 08/25/2011 - 14:23 | 1600807 Winston Smith 2009
Winston Smith 2009's picture

"But at least we will soon see just how efficient Dodd-Frank's bank insolvency contingency is in real life. Because we have a feeling the brilliant legislation penned by Barney Frank and Countrywide's senator, may fall just a little short..."

I began laughing at that first sentence until I read the second.  Uh, yeah, I'm sure DF will fall REAL short by being just as underutilized as the Prompt Corrective Action LAW put in place after the S&L scam, the law they've been ignoring since 2008.

Thu, 08/25/2011 - 14:40 | 1600903 Motorhead
Motorhead's picture

Wasn't Matt Simmons taking a bath, too?

(No disrespect to the Simmons family.)

Thu, 08/25/2011 - 18:51 | 1601963 Downtoolong
Downtoolong's picture

Never give up. Never surrender. Stay defiant to the end. Ignore and deny the bloodshed on your doorstep. Continue to pretend you are in control. Sacrifice anyone and anything to continue the fantasy.

I’m speaking of Gadhafi of course. Wait, you did realize I was speaking of Gadhafi…didn’t  you?

Thu, 08/25/2011 - 20:57 | 1602310 Buck Johnson
Buck Johnson's picture

They are going bankrupt, you can believe that.  Maybe Warrent Buffets 5 billion was money he could put in there to keep BAC going for just a little longer (with the money backstopped by the govt. of course) until they can get a good rescue plan together for the market.

Fri, 08/26/2011 - 20:19 | 1606232 falga
falga's picture

Ok BofA just borrowed capital at 15% when discount window open at 0% or very close to that! Something is seriously wrong here....

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