It's worse than you thought. National media report that the feds have told Bank of America it essentially failed its "stress test" and needs another $34 billion in capital in order to withstand further worsening of the economy. Earlier, many analysts had predicted a need for $10 billion in additional capital.
There are several ways BofA could get the money, and talk is widespread that the troubled banking behemoth may raise a portion of the extra capital, $8 billion, by getting rid of a third of its stake in China Construction Bank. The drawback for BofA is that it would have to make that particular move by tomorrow. While we're waiting to see what BofA does, and whether Ken Lewis will survive his newly diminished status at the bank, The Daily Beast site has a great story for you to check out. It's about "The Man Who Helped Wreck BofA," Angelo Mozilo, the cofounder of Countrywide Financial, which BofA acquired on Ken Lewis' watch. Mozilo faces a possible jail term for his company's allegedly deceptive practices. It's a fascinating look at the psychological make-up of "winner-take-all" businessmen, many of whom, of course, are currently "losing-it-all."