There was a great financier who stepped in on the second day of the Stock Market Crash in 1929. He was the richest man in the country and he had decided enough was enough. He would personally save Americas bacon by bailing out the stock market. He went around and bought shares in every large company, infusing millions and millions of dollars all over the stock market horizon. The market would not crash on his watch and for a while it seemed to work. The crash paused while people took heart that the richest man in the world had just rescued the market and by proxy the American economy. Then it went to the floor.
Now we seeWarren Buffet bailing out Bank of America with billions. Bank of America stock goes up nine percent and people are taking heart that one of the richest men in the world is giving the bank a vote of confidence. Too bad he gave the money to the wrong people. Bank of America is in the toilet because our homes are worthless and becoming more worthless. He should have just given the money to the homeowners. The bank mirrors the market and the derivatives that killed it and is now on the hook for billions in litigation. The great ship Buffet will not stem this tide. Bank of America is too big to fail but it seems destined too.
Because no one is doing anything for the very people who can bail out BOA: their customers. The bank prefers to just let everyone default while they foreclose on people whose only sin was to own a home that is now worthless. Bank of America is the Titanic of the Housing Crash. She holds tons of soured mortgage securities pawned off to people who are now suing them. She bought Countrywide. Talk about an iceberg laden with sub prime garbage. And she is taking water so fast that even Warren Buffets patch will not work. What is scary is that Buffett had to do this.
And what will the government do? Bail them out again? More money after bad. President Obama better do something for housing or he will be the Captain John Smith of the SS BOA breaking in two and heading for the icy darkness of our second Great Depression. Oh, that financier who tried to bail us out the last time: JP Morgan.