Here Comes TARP 2: Bank Of America Implodes, At $6.87, BAC CDS Up 20% To 260 bps As Bankruptcy Contemplated

Tyler Durden's picture

With Bank of America investors finally realizing it is game over for the company as a going concern, at this point there are just two options for Brian Moynihan: the spin off of CFC as a bad bank, backstopped by the Fed, or, well, Chapter 11, which for a bank is essentially liquidation (and with CDS trading up 50 bps to 260 a bankruptcy seems increasingly inevitable). It also means that another TARP is on the way. And once America realizes that another several trillion have to be put into its insolvent banking sector, it will get quite violent. The biggest irony: it is AIG which takes down the financial system for the second time after its lawsuit against BAC filed last night kills Bank of America.

And the full AIG filing which just put the final stake through the heart of America's most insolvent bank:

AIG versus BAC 8-8-2011

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
anynonmous's picture

I thougt Dodd Frank fixed all of this

no more too big to fail,right?

Cleanclog's picture

Anyone hearing of clearing clogs yet?  Counterparty freezes?  Are banks avoiding trades with BAC, C, etc yet?  And Europe?  Already had interbank risk problems last week.  What you hearing today?   Thx!

hedgeless_horseman's picture

GOOG seems to have pulled the plug on its finance portal.  /transitory/

Cognitive Dissonance's picture

Everyone is slowwwwwwww today. It seems the world is waking up to the real time financial fun house.

spiral_eyes's picture


America stagflating, Britain burning, Europe degenerating, here comes Benny to save the day with fuckloads of TARP cash. Back in the real world, another TARP would surely put the American credit rating at BBB at best, increasing likelihood of the death of the dollar as the global reserve currency to at least 9000%.


walküre's picture

You're quite mistaken.

The more it burns, the more the world keeps running back into the Dollar and Dollar denominated paper.

Look, the masters who setup the system and officiated the syndicate in 1913 are completely in charge. They own over 50% of all the world's wealth, maybe more.

This is their game, they're in charge. Their favorite gimmick is the US fiat and the US treasury paper.

Printing more of it actually increases the value. That's fucked but that's how smart these vermin have established the trade and the deck.

Haywood Jablowme's picture

The more it burns, the more the world keeps running back into the Dollar and Dollar denominated paper.


You gotta link?  Please don't talk about things you clearly don't know shit about.....




Spitzer's picture

He is wrong.

The only reason treasuries are going up is because that is how all bubbles pop. They must got up beyond belief.

If the asset that got downgraded is going up, that is beyond belief enough for me.

Haywood Jablowme's picture


He's correct in saying that this is their game but that's it.  The banking cartel positioned themselves out of USD a looooooong time ago.  On top of that, countries don't flock to USD then immediately strike trade deals in their own currencies and/or soon-to-be reserve currencies.  For someone that's been around for 1 year and 51 weeks, walkure hasn't been paying much attention....

Cleanclog's picture

Whoa,  Goldman just traded at $119!  Getting ugly for all the financials!  Couldn't happen to a more deserving group.

slaughterer's picture

Wait for at least $80 on GS before buying. 

Yardfarmer's picture

Apple is waiting in the wings.

Pladizow's picture

BOA has been held on death row for years and each passing day brings us closer to the day of execution.

I grin as if BOA is a criminal that murdered a friend.

Taint Boil's picture

One of my all time favorite stories I know BAC was one of them. Couldn't of happen to a better company.

How I stuck it to the credit card companies

Life of Illusion's picture



Nothing is too big for FED when Dodd-Frank granted super liquidation powers to the FED.

A controlled liquidation is a political connected investor’s dream come true.


slaughterer's picture

Today is the first day institutional holders of BAC-L Series L Preferred shares are frightened of BAC not maintaining the dividend on their senior preferred.   BAC-L is very good short, till about $350.00 cover, since BAC-L has only recently, in distinction to the common, started its plunge.   

mt paul's picture

too big

to stop

from failing ...

Stochdoc's picture

You are confused with Beans and Frank.

IQ 145's picture

Sold ZBU1@134-26/SHORT. at 11:47 NYDT today. That's the CME Long Bond Contract.

IQ 145's picture

LOL! Yeah, right. AIG; too big to fail, too big to run properly, terminally fucked up; needed a bullet in the brain, instead it got bailed out; big mistake.

DosZap's picture

IQ 145,@ 12:53

Bro, when it comes to this stuff,it's not a mistake,it's by design.

g's picture

Interesting that I happen to be watching today.

History repeats itself and that sucks, come on people wake the fuck up.

Escapeclaws's picture

Thanks g. This film is a real eye-opener. I was amazed at the parallels with the US. Menem could be a model for Obama. He literally stood up before his people when he was a candidate and shouted 5 times, "I will never betray you." Then when elected, he did a complete about face in every respect. Watch this film, you will be amazed and it will enable you to see what the program is for the US and what to expect from this crisis, which also had its Argentinian counterpart. There is nothing new under the sun. You can see clearly that there is a script for what happened there when you look at what is happening here.

jus_lite_reading's picture

THIS is it boyz and gurlz!!!


GAME OVER!!!!!!!!!!!!!


CAN anyone confirm that they have limited bank withdrawls at BAC????
HOLY!!!!!!!!!!! WTF!!


Stoploss's picture

Closed my accounts 2 weeks ago, let the bitch burn.. I wanna see the pics of the lines around the buildings when the run starts.

IQ 145's picture

Agree. As the Bikers used to say in Oakland; "Fuck'em if they take a joke".

pepperspray's picture

My brother in law told me a Times Square BAC ATM was out of service Saturday Night.

FischerBlack's picture

Did an online bill pay for $12K to my mortgage and what would normally be a next day thing is delayed until the 11th. Don't know if this is evidence of a problem. I've never sent that much money out before using the online system, so it may just be normal for the size of the transaction. Can anyone else confirm?

walküre's picture

You paid 12k towards your mortgage? Today?

Why would you not take that money out and buy gold instead????

Paying a mortgage.. now that's rich!

Haywood Jablowme's picture

+ a -3% $INDU....

Some people just don't get "it"....

IQ 145's picture

I bet this dude knows the name of every finalist on American Idol, and can quote last nite's MSN propaganda release, word for word; too bad he has no idea what's going on in the real world.

FischerBlack's picture

Is it safe to assume you don't have 12K lying around right now? That makes you either stupid or poor. In either case, I'm almost certainly better off not taking your advice.

bania's picture

so sorry bank of cramerica

Caviar Emptor's picture

Cramer had a raging, headline buy with a price target "I think it can top $20" 

astartes09's picture

I remember a similar piece about Bear Stearns.

IQ 145's picture

I see people talking about this person Cramer; I don't do TV personally; that's a remarkable quote. Of course, it's possible it could go to $20; but I'm convinced that one should be interested in what's more probable, and if possible, in what's most probable. He must be a very strange person.

drswhaley's picture

Where are Tepper's balls right now.  Looks like he got out according to Faber - when did he do that?  Did he lose like Paulson?

jus_lite_reading's picture

HIS BALLZ got stapled to the walls so he left them there!!!

Freewheelin Franklin's picture

He also dumped Wells and most of Citi, according to CNBC.

tmosley's picture

Is AIG controlled by Waddell and Reed?

Must be.  They killed Kenny, those bastards!

monkeyboy's picture

Soooooo, if you had your funds in BOA would you be withdrawing them, or is way past that time to be worrying about taking your cash out?

BOA bankrun?

Cleanclog's picture

I'm gonna go withdraw some there at BofA now . . . and some more at my community bank.  Just in case.  Not really saying ya should.  But cash does look pretty next to my gold and gems.

The Shootist's picture

Banken Runnen ! Sheep, GO!

Cthonic's picture

Took vast majority out in 2008.  I only keep a small checking account open there for online bill pay... may be time to prepay some things today, lol.  Oh if you think BAC will fall alone, don't forget about all of the money market fund and now account redemption suspension authority put in place in the past few years.

LibertyIn2010's picture

...ashes, ashes, we all fall down.

JW n FL's picture

we need 25% for QE-3 not 20%!

come on 25% drop!!!

o wait we are already there plus!!


to much cow bell!

JW n FL's picture

I wonder who will be a Jackson Hole this year calling QE 1 and 2 a failure? and walking away looking like a hero! all the while the Banks charge more interest on our National debt to off set the losses in real estate.

who will be the person that entertains the sheep while the bankers rob "We the People" blind thru national debt payments?