Comments on: BofA to Get Big Tax Bennies on Countrywide Purchase (and Critiques of the Deal) http://www.nakedcapitalism.com/2008/01/bofa-to-get-big-tax-bennies-on.html Mon, 23 Nov 2009 11:04:35 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Hubert http://www.nakedcapitalism.com/2008/01/bofa-to-get-big-tax-bennies-on.html#comment-2973 Hubert Sat, 12 Jan 2008 15:04:00 +0000 http://www.nakedcapitalism.com/2008/01/bofa-to-get-big-tax-bennies-on-countrywide-purchase-and-critiques-of-the-deal/#comment-2973 If there was a masterplan within BAC (what I very much doubt) it might have looked this way:<br/><br/>Acquire preferred stake, get Inside View, decide to take over, let the market wait, write all the credit insurance on CFC you can sell, and then take out shareholders shortly before a filing.<br/>Still this does not eliminate legal risks which could be substantial.<br/><br/>MOre plausible: Maybe BAC had written too much credit insurance on CFC before and confronted with paying out billions for CFC defaulting they calculated it would be cheaper to take over.... If there was a masterplan within BAC (what I very much doubt) it might have looked this way:

Acquire preferred stake, get Inside View, decide to take over, let the market wait, write all the credit insurance on CFC you can sell, and then take out shareholders shortly before a filing.
Still this does not eliminate legal risks which could be substantial.

MOre plausible: Maybe BAC had written too much credit insurance on CFC before and confronted with paying out billions for CFC defaulting they calculated it would be cheaper to take over….

]]> By: Anonymous http://www.nakedcapitalism.com/2008/01/bofa-to-get-big-tax-bennies-on.html#comment-2970 Anonymous Sat, 12 Jan 2008 10:09:00 +0000 http://www.nakedcapitalism.com/2008/01/bofa-to-get-big-tax-bennies-on-countrywide-purchase-and-critiques-of-the-deal/#comment-2970 the real motivation behind BAC's acquisition of countrywide could be hidden on BAC's off balance sheet<br/><br/>BAC's may have huge derivative exposure to Countrywide through CDOs and CDSs<br/><br/>Letting Countrywide default would have been disastrous and resulted in additional stress for BAC and financials more generally<br/><br/>BAC may be secretly averaging down... the real motivation behind BAC’s acquisition of countrywide could be hidden on BAC’s off balance sheet

BAC’s may have huge derivative exposure to Countrywide through CDOs and CDSs

Letting Countrywide default would have been disastrous and resulted in additional stress for BAC and financials more generally

BAC may be secretly averaging down…

]]> By: Anonymous http://www.nakedcapitalism.com/2008/01/bofa-to-get-big-tax-bennies-on.html#comment-2968 Anonymous Sat, 12 Jan 2008 09:05:00 +0000 http://www.nakedcapitalism.com/2008/01/bofa-to-get-big-tax-bennies-on-countrywide-purchase-and-critiques-of-the-deal/#comment-2968 <a HREF="http://www.economist.com/daily/news/displaystory.cfm?story_id=10518640" REL="nofollow">The <i>Economist</i> has an additional angle on this</a>: apparently, due to an arcane regulatory loophole, acquiring Countrywide will enable BoA to breach the 10% limit on nationwide deposits.<br/><br/>And naturally, it also has intangible value in currying favor with regulators, by relieving them of a huge headache. The Economist has an additional angle on this: apparently, due to an arcane regulatory loophole, acquiring Countrywide will enable BoA to breach the 10% limit on nationwide deposits.

And naturally, it also has intangible value in currying favor with regulators, by relieving them of a huge headache.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/01/bofa-to-get-big-tax-bennies-on.html#comment-2967 Anonymous Sat, 12 Jan 2008 07:57:00 +0000 http://www.nakedcapitalism.com/2008/01/bofa-to-get-big-tax-bennies-on-countrywide-purchase-and-critiques-of-the-deal/#comment-2967 <i>BofA succeeded in driving away the many of the best [US Trust] account officers, who took customers with them.</i><br/><br/>Well at least in the case of Countrywide, that won't be a problem. The employees who are kept on have nowhere else to go. <br/><br/>The headcount will have to be chopped, they might as well start with the loosest cannons. BofA succeeded in driving away the many of the best [US Trust] account officers, who took customers with them.

Well at least in the case of Countrywide, that won’t be a problem. The employees who are kept on have nowhere else to go.

The headcount will have to be chopped, they might as well start with the loosest cannons.

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