Bank of America cutting 30,000 jobs

That’s the headline on CNN today. Bank of America. Here’s some copy/pasting from the Wikipedia article on BOA:

The bank on January 11, 2008, announced they would buy Countrywide Financial knowing full-well that Countrywide was being investigated by the FBI for possible fraud relating to home loans and mortgages. This purchase made Bank of America Corporation the leading mortgage originator and servicer in the U.S. , controlling 20–25% of the home loan market. But wait, there’s more.

On September 14, 2008, Bank of America announced its intentions to purchase Merrill Lynch. This acquisition made Bank of America the largest financial services company in the world. That’s world. But wait; there’s more.

The Bank, in its January 16, 2009 earnings release, revealed massive losses at Merrill Lynch in the fourth quarter, which necessitated an infusion of money that had previously been negotiated with the government as part of the government-persuaded deal for the Bank to acquire Merrill. Merrill recorded an operating loss of $21.5 billion in the quarter.  With ‘the government?’ So you and I helped pay off the $21.5 billion? Wasn’t that nice of us?

Alas, we’re not done. The market capitalization of Bank of America, including Merrill Lynch, was then $45 billion, less than the $50 billion it offered for Merrill just four months earlier, and down $108 billion from the merger announcement. Nothing like ‘wise’ investments, eh?

More. Bank of America received $20 billion in the federal bailout from the U.S. government through the Troubled Asset Relief Program (TARP) on January 16, 2009, and also got a guarantee of $118 billion in potential losses at the company. Another sweetheart deal from us to them.

On August 3, 2009, Bank of America agreed to pay a $33 million fine, without admission or denial of charges, to the U.S. Securities and Exchange Commission  over the non-disclosure of an agreement to pay up to $5.8 billion of bonuses at Merrill. Tisk, tisk! The actual amount of bonuses paid was $3.6 billion, of which $850 million was “guaranteed” and the rest was shared amongst 39,000 workers who received average payments of $91,000; 696 people received more than $1 million in bonuses; at least one person received a more than $33 million bonus. One person; was it the one who suggested purchasing ML?

It ain’t over just yet. In 2010, the bank was accused by the US federal government of defrauding schools, hospitals, and dozens of state and local government organizations via misconduct and illegal activities involving the investment of proceeds from municipal bond sales. As a result, the bank agreed to pay $137.7 million, including $25 million to the Internal Revenue service and $4.5 million to state attorneys general, to the affected organizations to settle the allegations.  My, my, the bank of America indeed!

Speaking of ‘America’s bank,’ in January 2008, Bank of America began notifying some customers without payment problems that their interest rates were being more than doubled, up to 28%. The bank was criticized for raising rates on customers in good standing, and for declining to explain why it has done so. Criticized?  Tisk, tisk!

That brings us to today, “Bank of America cutting 30,000 jobs.” Really?  How odd that, in order to hold onto its market share, 30,000 people will be terminated.  I don’t suppose one of them was that guy who got the $33 million bonus, do you? Say, if that $33 million were divided by each of thos fired workers, they’d have $1,100 severance check to tide them over for a bit.  Just joking!

So now those 33,000 people will be on the government dole until they van get can find a job.  But BoA doesn’t give a hoot about them.  “We’re a much simpler company than we were 24 months ago,” CEO Brian Moynihan said.

Simpler? Oh, sure you are, Bank of America. Sure you are.

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7 thoughts on “Bank of America cutting 30,000 jobs

  1. Mud- My comment two posts back was not a challenge, it was an offer. From a man that did not study economics too a man claiming to understand it quite well. But one question I have is perfect for this post here.

    Couldn’t the congress pass some sort of legislature to bring jobs shipped overseas, back to the states? Of the 33,000 BoA jobs lost, I’m curious how many were lost to customer service outsourcing. What do you think?

    And please don’t mention the wealthy, reinvesting in this country. I agree with your point of view on that one.

    1. JOB- I do not claim any expertise in economics. I took economics 101, but that was the extent of my ‘understanding’ of it. What I replied in the previous thread was historical, not economics. I’ll repeat it- if the private sector is sitting on capital and is unwilling to invest in job creation, then the only alternative for this nation is for the Federal government to invest.

      Obama’s plan does just that and, surprise, it is paid for by eliminating many of the special interest tax gimmicks that politicians wrote for specific businesses and corporate institutions. Who could be against closing those special interest deals? Well, a certain group of people come to mind– or rather two groups come to mind. The most obvious are those who directly benefited. The second are the mindless dolts who cheer for these people against their own interest and the interest of the nation itself.

      The BOA jobs are all in the U.S. After all, they are the most expensive workers the bank has. Duh!

  2. ATTENTION WINGNUTS WHO READ THIS BLOG: Please note that all this messy money stuff started to happen PRIOR to noon EST on January 20, 2009 when Barack Obama became the 44th President of the United States. This would be one of those pesky things we keep telling you Bush left for the next guy who you blame for the increasing national debt.

    Several courses of economics was required for my accounting major; ask away. As for foreign jobs working for Bank of America, the bank has branches all over the world so there are many non-Americans working for Bank of America in the country where the branch is located. You have to be v-e-r-y careful about building international walls as the other countries will just retaliate with their own laws. Don’t forget that a whole bunch of the stuff we still produce in this Country is sold overseas. I think the biggest problem with our sales (or lack of sales) overseas is stolen technology. Companies here spend tons on research and development then pass the cost onto us through the price of the product. Certain foreign countries ignore our patent laws to produce the new product much cheaper. They even sell it back to us sometimes.

    Now you’re probably saying “we should go after these crooks”. Here’s one story that might help you understand. Drug companies in the United States spend billions on development. A very small percentage of new drugs come to market, but they have to bear the cost of all research and development. Along comes a foreign country that says you either sell us the drugs at an artificially low price or we’ll make the drugs ourself. So the drug manufacturer is stuck between a rock and a hard place. It decides it has to sell the drug at the low price in the foreign country, but in the U.S. the drug is much more expensive because now it’s U.S. price must carry all the research and development costs. Then some Americans hear about these cheap prices and flock across the border to buy the exact same drugs, but at a cheaper price. The United States has now made this illegal, but obviously only for the American purchasers, not the foreign sellers. Oh my goodness you say? How easy can it be for Americans to flock to a foreign country. They did it in Toledo and they were back in time for lunch.

    By the way, this isn’t the first time our northern neighbor has screwed us. During prohibition it was also illegal to drink in Canada. But not to produce the juice; the busiest illegal bootlegger crossing was Detroit.

    1. Good analysis, Jeff. I’ll let you lead on the economics aspects as my expertise is in other areas. Yet, you are correct in pointing out that the morons currently applauding the GOP candidates on CNN this evening ‘believe’ that the present situation is 100% Obama-caused. But then, they ‘believe’ lots of things.

      Of course is it a whole lot easier to ‘believe’ something than to defend it factually.

  3. BOA, the recipient of not only BILLIONS in bailout funds, but numerous tax breaks as well, proves beyond the shadow of all doubt that the Republican insistence that tax cuts will create jobs and spur the economy is a LIE!!!

  4. J.O.B. I’m not sure how many jobs were lost to outsourcing.

    Yes, there could be a law passed about jobs being shipped overseas, but how likely is that to happen given that big business pretty much funds the US legislature through campaign contributions (check out ALEC as well). I can say other countries have laws to prevent outsourcing of jobs (e.g., Germany).

    Anyway, Jeff is pretty much correct in his analysis.

    But, the ultimate bottom line is that 30-40,000 jobs will be lost.

    How can there be a recovery when jobs are disappearing?

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