That sinking feeling

8 August 2011 By Antony Currie Follow @AntonyMCurrie

Its shares fell 15 pct after the U.S. debt downgrade and AIG’s $10 bln home-loan lawsuit. Other mortgage-heavy banks were hit, but none as bad as BofA. Investors now reckon it’s worth $135 bln less than breakup value. That’s a huge housing hole for CEO Brian Moynihan to escape.

This content is for Subscribers only

Context News

AIG sued Bank of America on Aug. 8 for more than $10 billion, claiming it was the victim of massive fraud in buying $28 billion of mortgage-backed securities from the bank and two firms it acquired, Countrywide and Merrill Lynch.
Bank of America spokesman Lawrence Di Rita told Reuters: “AIG recklessly chased high yields and profits throughout the mortgage and structured finance markets. It is the very definition of an informed, seasoned investor, with losses solely attributable to its own excesses and errors. We reject its assertions and allegations.”
BofA’s shares fell as much as 21 percent by mid-afternoon on Aug. 8.
BofA Chief Executive Brian Moynihan has agreed to a live, public, 90-minute interview on Aug. 10 conducted by hedge fund manager Bruce Berkowitz of Fairholme Capital.

Context News

Email a friend

Please complete the form below.

Required fields *