Can Brian Moynihan Save Bank of America?

There has been a lot of news and speculation as of late about Bank of America (BAC).  Two weeks ago, Warren Buffet invested $5 Billion to help shore up the company amidst rampant rumors that the bank was going down.  Since then, there continue to be lots of stories about Bank of America’s troubles from lawsuits, to layoffs, to a complete restructuring of the business call Project New BAC.

Bank of America’s troubles seem to mostly be coming from its acquisition of Countrywide.  There’s even a story today that perhaps Bank of America should consider bankrupting its Countrywide division or possibly the entire company according to Chris Whalen.  I’m not sure how they could just bankrupt the Countrywide part of the business, but there are lots of high paid accountants, consultants, and attorneys who I’m sure can figure this out.

There are many who would like to see Bank of America go away, but if it does, it will have a massive negative impact not only on Charlotte, NC where it’s headquartered, but also the U.S. as well as the global economy.  I suspect the BofA situation is a top priority right now for Secretary of the Treasury, Tim Geithner, as well as the Federal Reserve Chairman, Ben Bernanke.  After all, Bank of America is consider “too big to fail” (TBTF).

UPDATED September 12, 2011 at 12:30 PM:  Bank of America announced at an investors meeting today that they intend to cut 30,000 jobs over the next few years and will save $ 5 billion per year in payroll and expenses.  That equates to $166k per employee cut.  Those are very good jobs going away.  (Note, that $166k obviously doesn’t all go to an employees wages – there are benefits, insurance, office and technology equipment, office space etc).  In any event, Bank of America is clearly trying to make the bank smaller.