JP Morgan May Take Over Bank Of America

marketwatch.com

23 points·chailatte··11 comments

This scares me, because if the U.S. ends up in a situation where the entire country is relying on even fewer financial institutions than it is now, then the government will definitely consider them "too big to fail." Not that the situation isn't bad already, but I can only see this making it worse.

Do you think they'll try to do an AT&T and break them up into hundreds of little pieces?

Probably not in the current political climate.

This will definitely not happen. There is no way it would win the support of BAC's shareholders and board.

The deal must be off; BAC is up 11% today.

Can someone explain why normal everyday chapter 11 bankruptcy is not applied to banks?

Why can't they wipe out the shareholders, sell off the assets, and pay the creditors from that?

The facile answer is that it's simple corruption. The slightly longer and more nuanced answer is that allowing such a failure to happen would cause more chaos and disruption than is politically acceptable to our elite decisionmakers.

First paragraph:

> The "merger" would completely destroy the value of BAC's common shares.

That would instigate a bank run by BofA's account holders, and possibly bank runs by account holders at other banks worried about the stability of their own financial institution.

In other words, total financial collapse of the American economy.

One bank to rule them all?

JPMorgan Chase Bank of America Merrill Lynch will rule us all

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