201 Street

Bank of America’s acquisition of Countrywide Financial has analysts, investors and the media a bit nervous. BusinessWeek took a look at the situation and did not have good news to report. In today’s top story, they exposed the shaky background of Countrywide and its affect on Bank of America (BofA). “. . . The Countrywide buyout brings BofA lots of trouble. The quality of Countrywide’s loans is much worse than the loans on BofA’s balance sheet. BofA said July 21 it will need to deal with $40 billion in troubled mortgage loans at Countrywide.”

This news is softened by the bank’s reported share prices. Although the result was still a loss, share prices were not down as much as analysts had predicted. Kenneth Lewis, Bank of America Chairman and Chief Executive, is using this data as proof of the bank’s strength in the midst of the current economic adversity. However, BusinessWeek was not fully convinced. The upcoming weeks will show if investors buy into it.