Bank of America: We're All Set to Fail

h/t Zerohedge

It smelling a lot like 2008 all over again. Recent weeks with a major sell-off in the markets, financials getting (BofA, Chase, Morgan Stanley, Citi, etc) whacked by 5% or more, treasuries selling hard... the only difference would be gold is now a flight to safety. Will Bank of America, now being recognized as the insolvent zombie that it is, set off Great Depression 2.0?

Via Forbes

Bank of America, the nation’s biggest bank, can’t seem to shake off the legacy of its mortgage-related sins, namely the purchase of Countrywide Financial, the poster-boy of reckless subprime lending.

Investors pushed down Bank of America’s stock by more than 13% on Monday morning, marking the third straight trading day that the bank has suffered a major share drop. The stock has now tumbled by 47% in 2011.

Via The Atlantic Wire

The American International Group is suing Bank of America over loses taken from mortgage-backed securities , The New York Times reports. A.I.G. is asking for a little more than a third of what they invested into Bank of America and its Merrill Lynch and Countrywide Financial units, which works out to $10 billion over investments of $28 billion. The suit claims Bank of America "misrepresented the quality of the mortgages placed in securities and sold to investors," according to a Times source. A.I.G. isn't stopping after suing Bank of America either. They're also preparing suits against Goldman Sachs, JPMorgan Chase, and Deutsche Bank as part of a wider "litigation strategy" that hopes to recover billions in loses the now taxpayer-owned company sustained during the recession. There are at least 90 lawsuits over mortgage bonds right now asking for around $197 billion to change hands, according to an analyst who spoke to The Times. A.I.G. is expected to formally file the complaint to the New York Supreme Court on Monday.