Rumor: JP Morgan could take over BOA

myp · Aug 23, 2011

As Bank of America continues struggling, there is new speculation that JP Morgan could take it over in a deal that would involve a $100 billion investment from the Federal government. In order for the deal to go through, the Treasury would have to waive a rule that limits the marketshare a financial institution can hold because the merger would mean the new entity would be too big.

So basically, they are [potentially] trying to save an under-capitalized bank by merging it with another under-capitalized bank by making both banks bigger because the failing BOA might currently be deemed "too big to fail". And in order to do that, they would once more allow big finance to be above the law. Yep, free markets are really the problem /sarcasm.

source: http://247wallst.com/2011/08/23/jp-morgan-may-take-over-bank-of-america/

David · Aug 23, 2011

myp said:
As Bank of America continues struggling, there is new speculation that JP Morgan could take it over in a deal that would involve a $100 billion investment from the Federal government. In order for the deal to go through, the Treasury would have to waive a rule that limits the marketshare a financial institution can hold because the merger would mean the new entity would be too big.

So basically, they are [potentially] trying to save an under-capitalized bank by merging it with another under-capitalized bank by making both banks bigger because the failing BOA might currently be deemed "too big to fail". And in order to do that, they would once more allow big finance to be above the law. Yep, free markets are really the problem /sarcasm.

source: http://247wallst.com/2011/08/23/jp-morgan-may-take-over-bank-of-america/

Why not let a small, family owned and currently 1-2 branch local bank take them over? Irony aside, the better ethics of such a bank would probably make such a merger smarter economically, at least in the long-term. But that won't happen, we have a corporatist economy, they'll all help each other, what's best for America be damned.

myp · Aug 24, 2011

David said:
Why not let a small, family owned and currently 1-2 branch local bank take them over? Irony aside, the better ethics of such a bank would probably make such a merger smarter economically, at least in the long-term. But that won't happen, we have a corporatist economy, they'll all help each other, what's best for America be damned.

Well usually when a bank shuts down its assets go into FDIC auction over the weekend and it reopens by Monday. The thinking is probably that BoA is too big for that. Perhaps more importantly, BoA has too many shit assets that no one wants.

As for having better "ethics", who are you referring to? The mom-and-pop bank or JPM?

And just a general question to you David (not in the intention of provoking you, but out of curiosity): from your past posts I thought you supported TARP and I presume with that the general Paulson plan that led several shady deals of this sort. You also seem to support Federal backing of these entities when they are failing, yet in this post you criticize corporatism. What did ya expect when you let the government force deals between banks and pay big money to them?

David · Aug 24, 2011

myp said:
Well usually when a bank shuts down its assets go into FDIC auction over the weekend and it reopens by Monday. The thinking is probably that BoA is too big for that. Perhaps more importantly, BoA has too many shit assets that no one wants.

As for having better "ethics", who are you referring to? The mom-and-pop bank or JPM?

And just a general question to you David (not in the intention of provoking you, but out of curiosity): from your past posts I thought you supported TARP and I presume with that the general Paulson plan that led several shady deals of this sort. You also seem to support Federal backing of these entities when they are failing, yet in this post you criticize corporatism. What did ya expect when you let the government force deals between banks and pay big money to them?

Mom and pop banks.

And no, I was opposed to TARP (I wan't posting here at the time, so I'll forgive you misstating my position), the nationalization of AIG America and the bailouts of the Big 3 (well 2, Ford said no). When I defend those actions isn't not that I actually agree with them but simply recognize that they happen and in that context they're not as bad as the far right makes them out to be. The far right claims that it was all a waste of money (the fact we didn't go into a depression indicates otherwise) and I simply correct that, that doesn't mean I'm happy about it.

The bailouts were moral hazards and allowed companies that should of filed to survive while giving them the impression that they could fail as many times as they wanted without risk. In the short t mid-term they worked and I'll admit as much but long-term it'll do more harm then good.

myp · Aug 24, 2011

Fair enough- the short-term effect is arguable, I realize that. I am not so sure it was good even for the short given the uncertainty it created (I also don't like the method through which help was offered). That aside though, forget the far right, far left and center for that matter- most of the politicians and political followers on every side had no idea how the system was structured, what actually went wrong or why, and they still don't know to this day. There are of course people all along the line who do know to some extent, but they are the small minority in any of the political groups (far left, right, center, etc.). The majority of the people and politicians have no idea and some of the latter know but have too much to gain to do anything about it.

Rumor: JP Morgan could take over BOA

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