Warren Buffett Attempts to Stick-Save Bank of America, Stock Gets Hammered

LA Times Reports

Bank of America, under fire from shareholders and analysts, is getting a $5-billion investment from Warren Buffett's investment company. The banking giant's stock soared this morning on the news.
The investment by Berkshire Hathaway is reminiscent of a $5-billion investment Buffett made in Goldman Sachs in September 2008 in the depths of the financial crisis. That injection of capital helped restore confidence in Goldman and helped the Wall Street firm attract other investments.
As with the Goldman infusion, Buffett negotiated extremely favorable terms from Bank of America. He is set to receive BofA preferred shares that will pay Berkshire a 6% dividend each year. If the bank wants to redeem the shares it has to pay Buffett a 5% premium.

Market-Ticker.org

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.

A Historical Perspective of Usury

"For the love of money is the root of all evil" -- II Timothy 6:10

Money

"The most sinister and anti-social feature about bank-deposit money is that it has no existence. The banks owe the public for a total amount of money which does not exist. In buying and selling, implemented by cheque transactions, there is a mere change in the party to the whom the money is owed by the banks. As the one depositor's account is debited, the other is credited and the banks can go on owing for it all the time.

"The whole profit of the issuance of money has provided the capital of the great banking business as it exists today. Starting with nothing whatever of their own, they have got the whole world into their debt irredeemably, by a trick.

"This money comes into existence every time the banks 'lend' and disappears every time the debt is repaid to them. So that if industry tries to repay, the money of the nation disappears. This is what makes prosperity so 'dangerous' as it destroys money just when it is most needed and precipitates a slump.

"There is nothing left now for us but to get ever deeper and deeper into debt to the banking system in order to provide the increasing amounts of money the nation requires for its expansion and growth. An honest money system is the only alternative." -- Frederick Soddy, M.A., F.R.S., Nobel Prize Winner, 1921

As the above makes clear, banks are able to manipulate "money" using various methods like the debiting of one account and the crediting of another, and so on, thus "balancing" the accounts. Banks also "create" money in more ways than one, through a trick that will be looked at later on.

Economists use the term "create" when observing the process by which money comes into being. Thus, creation means making something that did not exist before.

A sawmill makes boards, workers build houses from timber, a glass-blower makes fancy glass ornaments. In these examples, they did not "create", but converted already existing materials into a more usable, and thus more valuable form.

However, money "creation" is somewhat different. Here, and here alone, man "creates" something out of nothing. Pieces of worthless paper are printed, given various denominational values, which can be used to purchase, for example, a glass ornament. Its value (of the money, or piece of paper) has been "created" literally out of thin air.

As we can see from the above, manufacturing money is dirt cheap, and whoever does the "creating" and issuing stands to make impressive profits  (Click below for full article)