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Buffett Bails Out Bank of America
Posted By Barry Ritholtz On August 25, 2011 @ 9:37 am In Bailouts,Corporate Management,Credit | Comments Disabled
Make no mistake about this: Warren Buffett just saved Bank of America’s bacon.
A few items leap out this announcement:
1) BoA needed both capital and a reputation reboot. Buffett provided a little bit of both.
2) This gives lie to the claim that BofA needed no money
Counter argument — this was about the stock slide, not the capital structure, which remains opaque .
3) The fine print will be revealing of the specifics of the terms, but I am curious as to how this compares to the deal cut with Goldman Sachs (GS) and GE.
4) Buffett met with Obama a few days ago; I wonder what was discussed in THAT meeting.
5) Investors are cautioned that unless you are buying on the same terms as the billionaire, you are making a very different bet than he is.
More to follow later today.
• Buffett Invests $5 Billion in BofA (WSJ )
• Bank of America Says Buffett’s Berkshire Will Invest $5 Billion (Bloomberg )
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2011/08/buffett-bails-out-bank-of-america/
URLs in this post:
 opaque: http://www.ritholtz.com/blog/2011/08/big-banks-under-capitalized-overexposed-opaque/
 WSJ: http://online.wsj.com/article/SB10001424053111904787404576530211731979854.html
 Bloomberg: http://www.bloomberg.com/news/2011-08-25/berkshire-hathaway-to-invest-5-billion-in-bank-of-america-shares-surge.html
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