BofA Struggles With Loan Losses
Bank of America Corp. says it lost more
than $2 billion in the third quarter as its loan losses continued
to rise.
BofA’s Lewis to Get No ‘09 Salary, Bonus
Bank of America Corp.’s outgoing CEO, Ken Lewis, will get no salary or bonus for 2009 under an agreement with the government pay czar, who is scrutinizing compensation at bailed-out banks.
BofA Said to Give Up Merrill Documents
After months of resistance, Bank of America Corp. is turning over documents related to legal advice it received on the purchase of Merrill Lynch & Co. to the office of New York Attorney General Andrew Cuomo.
Job Worries Still Hurting Retail Sales
America’s stores saw some signs of life from
consumers in September, resulting in the first sales gain since
July 2008 and fueling some hope for the holiday shopping season.
Warren Buffett Has No Regrets About the Past Year — Do You?
This article is GRS staff writer Adam Baker. In addition to his work at Get Rich Slowly, Baker blogs over at Man Vs. Debt, where he maintains a list of every single item his family owns.
It’s no secret that J.D. loves him some Warren Buffett. Honestly, though, who doesn’t? Financial wisdom seems to ooze from his pores. Previously on Get Rich Slowly, J.D. has touched on Buffett’s philosophies, well-known frugality, and charitable efforts.
Buffett was born, raised, and still lives in Omaha, Nebraska. Even as a child, Buffett constantly tinkered with business concepts. He filed his first income tax return at age 13, including a $35 work expense deduction for his bike and watch. These days, at age 79, Buffett is one of America’s most respected business minds and constantly jockeys with Bill Gates and Carlos Slim Helu for the position of richest person in the world.
A couple of weeks ago, CNBC ran a special “One Year Later” interview with Buffett marking the one-year anniversary of the height of the financial crisis. The interview is relatively short (just under twelve minutes), but manages to touch on everything from specific phone conversations to the state of healthcare reform.
The video below is courtesy of CNBC, which has also provided a downloadable PDF of the full-transcript.
Lehman and AIG call on Buffett for help
For me, the most intriguing part of the interview is when Buffett discusses his call from Bob Diamond, the head of Barclays. The venerable investment bank Lehman Brothers was in a desperate state, and Barclays, a British financial services firm, was looking to step in and take over the operation. Because of the size of the deal, though, British authorities were requiring a vote of the shareholders, which would take several days to organize. Knowing Lehman’s time was extremely limited, Barclays wanted Buffett to insure the transaction, effectively providing a short life-line to Lehman Brothers while the Barclays shareholders could be organized for a vote.
Buffett admits that during the initial phone call, he couldn’t understand the details of what would be required in the transaction. He laughs at how he received the first call just before heading into a dinner party on Friday night. Ultimately, Buffett requested additional information, but the inevitable meltdown started only hours later. To this day, Buffett still isn’t completely clear on what they wanted him to do.
This was only one of a couple phone calls Buffett received that weekend last September. Buffett’s recollection of the events couldn’t have been more entertaining if Hollywood had written the script itself. Ultimately, though, none of the transactions that were discussed came to fruition.
When asked directly if he has any regrets about the decisions he made (or rather didn’t make) during that weekend, Buffett responds, “No.” He adds with a chuckle that “it was a movie to see, but not to participate in.”
Buffett’s endorsement of government intervention
Ultimately, though, Buffett praises the government intervention that occurred in the weeks and month after the events. He even used the word “heroes” to describe:
- Federal Reserve Chairman, Ben Bernanke
- Former Treasury Secretary, Henry Paulson
- Current Treasury Secretary, Timothy Geithner
Buffett says that without their actions, “it would have gone further than anybody would have wanted to see.”
The public has been quick to criticize much of the government response over the last year. The approval ratings of Bernanke, Paulson, and Geithner aren’t exactly at all-time highs, so I find it interesting that Buffett provides such a strong endorsement of the actions of both Presidential administrations.
The state of the recession and the future of the economy
When pegged for his opinion on whether the recession is over, Buffett opines that “it’s sort of plateaued…” and that, barring any single catastrophic event, things should start to improve. “We’re past the critical point,” he finishes.
Strong words of hope from one of America’s most trusted sources of investing wisdom. But, what do you think? Do you see evidence that we’ve “plateaued”? Is the worst behind us? Do you feel the government intervention over the past year has helped the recovery — or delayed it?
For a more complete picture on Buffett’s responses, be sure to watch the full video interview. It’s well worth twelve minutes of your time!
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Related Articles at Get Rich Slowly:
- Win Lunch with Warren Buffett
- What Would Warren Buffett Do?
- links for 2007-03-13
- links for 2007-01-11
- The Billionaire Next Door: The Wisdom of Warren Buffett
Who Should Replace BofA’s Ken Lewis?
Ken Lewis, who will retire as CEO of Bank of America at the end of the year, oversaw the creation of one of the country’s biggest banks over the last eight years. In hindsight, it looks like Bank of America’s corporate strategy is deeply flawed, and in order to make the bank viable again, a CEO will need to come in who can make big changes.
BofA CEO Ken Lewis to Step Down
After 40 years with the company, embattled Bank of America CEO Ken Lewis announces that he will step down by year’s end. “Bank of America is well positioned to meet the continuing challenges of the economy and markets,” Lewis said in a statement. “I am particularly heartened by the results that are emerging from the decisions and initiatives of the difficult past year-and-a-half.”
BofA Investors Not Sweating Legal Woes
Lately it seems that barely a day passes without a new legal headache arising for Bank of America. Monday was no different, as a group of pension funds filed a class-action suit in a federal court in Manhattan seeking “billions of dollars” in damages stemming bonuses paid to Merrill Lynch executives around the time of the companies’ merger late last year. But despite its legal woes, investors don’t seem to be too shaken.
More Banks Dropping Overdraft Fees
Just a few days after Bank of America and Chase announced that they’re revamping the way they charge for overdrafts, Wells Fargo and U.S. Bank are getting in on the action.
Daily Links: Paperback Writer Edition
At long last, work has begun on my first book. The outline is complete, the contract approved, and writing has commenced. It’s a little overwhelming. Writing for GRS everyday has taught me to create short personal pieces on a deadline. But 300 pages? Wow. That’s like Mt. Everest! As clichéd as it sounds, I’m trying to take it one step at a time. I’m breaking things into small pieces. If I can finish three manuscript pages per day, I’m golden.
Speaking of “golden”, here are some great finance articles from elsewhere around the web:
First up, I enjoyed these questions and answers with a lottery winner. This fellow fellow managed to get rich quickly — but he’s being smart with his prize. He won a $30 million lottery jackpot, which netted him $20 million after taxes and fees. He gave a million to each of his parents, gave a million to his sister, and paid off the debt of some of his life-long friends. Determined to avoid the mistakes of other lottery winners, he put it all in a blind trust and has been traveling the world ever since. (To get “just the good stuff”, track the fellow’s answers by his username.)
You all know that I’m a fan of JLP’s number-crunching over at All Financial Matters. Well, he’s done it again. He has two posts that look at the real-life numbers behind our economy. First, he shares the 20-year rolling returns of the S&P 500 from 1926-2008. How has the stock market performed over any 20-year period? You can find out here. He’s also worked up a table showing the history of inflation in the United States from 1920 to 2008. Look at 1973-1981! Wow.
Many GRS readers loved Karawynn’s recent articles during the Staff Writer auditions. I did too. She’s continuing to produce good stuff over at her site, Pocketmint. Recently, for example, she posted “an unflinching look at America’s fascination with cheap“. This is a fascinating article (er, book review). Karawynn fans should look for a guest article from her soon at GRS.
Finally, a reader named AmyJo pointed me to a post at Buttons Magee in which the author describes her efforts to construct a wardrobe using thrift-store clothing. Rachel decided on a look she wanted, inventoried the clothes she already owned, and then created a shopping list for the new items she needed. She made a plan. She says that smart thrift shopping takes work, but can yield huge savings.
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Related Articles at Get Rich Slowly:
- Return of the Daily Links
- Daily Links: Compound Interest, Web Income, and Happiness
- Daily Roundup: Bringing Home the Bacon Edition
- Daily Links: Debt Reduction, Stupidity, and Mutual Funds
- links for 2006-09-12
WalletPop Review: Michael Moore’s ‘Capitalism: A Love Story’
America is Rome, and it’s toppling. That’s the opening salvo from Michael Moore in his blistering new documentary, “:Capitalism: A Love Story,” which opens in New York and Los Angeles today and across the country Oct. 2. That’s a dispiriting message that everyone can agree with, be they affiliated with Fox News or MSNBC. And if you accept that premise, the rest comes easily in this feast of outrage.
Buying a Home Without a FICO Score
Nearly every personal finance guru in America will tell you that it’s important to build and maintain a high FICO score — and that good credit is a sign of financial prudence and responsibility. Lenders will reward you for that responsibility with a lower interest rate loan.
Buying a Home Without a FICO Score
Nearly every personal finance guru in America will tell you that it’s important to build and maintain a high FICO score — and that good credit is a sign of financial prudence and responsibility. Lenders will reward you for that responsibility with a lower interest rate loan.
Five BofA Board Members Subpoenaed
The New York Attorney General’s office has subpoenaed five members of Bank of America’s directors as part of an investigation into the bank’s acquisition of Merrill Lynch, according to a personal familiar with the investigation.
