Buffett Bails Out Bank of America

Make no mistake about this: Warren Buffett just saved Bank of America’s bacon.

A few items leap out this announcement:

1) BoA needed both capital and a reputation reboot. Buffett provided a little bit of both.

2) This gives lie to the claim that BofA needed no money

Counter argument — this was about the stock slide, not the capital structure, which remains opaque.

3) The fine print will be revealing of the specifics of the terms, but I am curious as to how this compares to the deal cut with Goldman Sachs (GS) and GE.

4) Buffett met with Obama a few days ago; I wonder what was discussed in THAT meeting.

5) Investors are cautioned that unless you are buying on the same terms as the billionaire, you are making a very different bet than he is.

More to follow later today.



• Buffett Invests $5 Billion in BofA (WSJ)

• Bank of America Says Buffett’s Berkshire Will Invest $5 Billion (Bloomberg)

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