On Jul 16, Former Treasury Secretary Henry Paulson is expected to testify before the House Oversight and Government Reform Committee as to whether he and/or other government officials pressured Bank of America (BAC) to acquire Merrill Lynch, which resulted in a $20 billion cost taxpayers.

This will follow BAC CEO Kenneth Lewis' statements before the committee that both Paulson and Federal Reserve Chairman Ben Bernanke threatened to oust BAC's CEO and the bank's board members if they abandoned the takeover after discovering losses at Merrill.

In September 2008, BAC agreed to acquire Merrill Lynch, which resulted in the government supplying an additional $20 billion to BAC in order to cope with rising losses following the acquisition. This was on top of the $25 billion from the government's bailout program.

We would be surprised if the story behind the headlines is ever revealed.

Read the full analyst ...

MARKET COMMENT April 28, 2009 I wish my Money & Banking class in college was this easy—hell, even gym was hard by comparison to current bank stress tests. Basically it’s an open book test allowing banks to set their own evaluations on some toxic waste and hope investors take it all in stride. The false and misleading statements from CEOs like BAC CEO Ken Lewis are, in ordinary times, shocking. These days it passes for business as usual. “We don’t need any capital….we’re sound...we can return TARP money today…and so forth.” So, BAC and C do in fact need more capital. Who knew!?! Today markets were pulled lower by iffy stress test results and pushed higher by better than expected (there’s that bullish slang again) consumer confidence numbers. Volume remains light and one would imagine more action will result ...

Let’s face it, we’re ALL looking for discounts. I don’t care if you’re rich, poor, hurt by the economy, or not…everyone loves a discount. And since this is a site that focuses on trading/investing, what better then to learn about how to get a discount for a stock! To help us learn the art of the discount, I’ve asked Phil Davis from PhilStockWorld.com to come and enlighten us. Enjoy the article and tell us where you’ve found great discounts!

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If this market hasn’t convinced you that buy and hold is a gamble - I don’t know what will.

Holding any stock for more than a day has been a sure recipe for heartache (sometimes just an hour will do it) but it’s possible to regularly get much better prices than the ones paid by the average retail investor using a very basic option strategy. This strategy, which we call a

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The Financial Tsunami continues to flood the streets of lower Manhattan, Wall Street is completely under water.  LEH filed for chapter 11 protection last night, which in my humble opinion is what Bear Stearns (BSC) should have done.  BAC bought out MER for $50 Billion and AIG is seeking assistance from regulators.  What this has done is create the beginnings of a cataclimisic event, but we aren’t for sure if we are going to get it.  Futures this morning were down and down big:  NASDAQ -50pts, S&P500 -42pts, Dow -335pts.  Back in January we did see a drop of this magnitude but we were able zoom back well off the highs.  I’ll be looking at how we come off the lows and how the market will react after Monday’s trading session.

It will be rather tempting to hop into the market Monday at the open.  The absolute best thing to do

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Well, they say it's better to know than to not know, even if the news is not good.  Lehman Brothers (LEH), the 158-year-old investment bank (according to an AP report this morning), has officially filed for bankrupcy.  It seemed for a time that a rabbit may have been pulled from a Korean hat to save the New York banking stalwart, but no such luck.

It wouldn't be overstating it to say that this is a true American disaster.  That it comes at the peak of hurricane season elsewhere in the U.S., one can easily bring to mind the image of a slow-motion Category 5 still wreaking havoc on Wall Street.  From the beginning of the year with Bank of America, or BofA (BAC) buying out Countrywide through the collapse of Bear Stears into JP Morgan's (JPM) arms, 2008 will mark a negative touchstone in the history of U.S.

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Well, they say it's better to know than to not know, even if the news is not good.  Lehman Brothers (LEH), the 158-year-old investment bank (according to an AP report this morning), has officially filed for bankrupcy.  It seemed for a time that a rabbit may have been pulled from a Korean hat to save the New York banking stalwart, but no such luck.

It wouldn't be overstating it to say that this is a true American disaster.  That it comes at the peak of hurricane season elsewhere in the U.S., one can easily bring to mind the image of a slow-motion Category 5 still wreaking havoc on Wall Street.  From the beginning of the year with Bank of America, or BofA (BAC) buying out Countrywide through the collapse of Bear Stears into JP Morgan's (JPM) arms, 2008 will mark a negative touchstone in the history of U.S.

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Just wait until Bank of America (NYSE:BAC) cuts their dividend, then how low will shares get? Barron's lowered their outlook on BAC last week.  They now expect BofA's 2008 and 2009 earnings-per-share estimates to $2.20/$3.60 (from $2.70/4.00), largely reflecting continued uncertainty on the credit front and a more-conservative view of structured products/capital markets near term. Our second-quarter 2008 EPS estimate falls to 55 cents from 79 cents. Barron's ...

Big Banks are dying, WaMu (NYSE:WM) hit $6.05 and BofA (NYSE:BAC) hit $29.34 today. It's one thing for Crocs Inc (NASDAQ:CROX) to hit $9.03, but our U.S. financial institutions?  Good Lord. Other 52-week lows include (via 247WallSt.com): AMBAC (ABK) Sells off to $2.02 after downgrades. The 52-week high was $89.33. MBIA (MBI) Also hit by downgrades and drops to $4.78 from 52-week high of $68.98. Wachovia (WB) Flamed. Down to $18.22 from 52-week high of $54.54. Gatehouse (GHS) Newspapers still hit hard. Falls to $3.50 from 52-week high of $19.64. McClatchy (MNI) Another newspaper company sells off to $7.77 from 52-week high ...

CNBC Stock Blog: Bernie McGinn says forget subprime — buy bank stocks. Which one did he call a “tremendous franchise”?

He also likes Bank of America (BAC).

“Bank of America represents a pretty good buy right here,” he said.  “It’s a tremendous franchise; it’s the number one in deposits, it’s number one in credit-card balances, it will be number one in mortgages.”

Of course, it is that last part that makes me nervous. In the models I use, Bank of America is most notable for poor earnings momentum, poor earnings quality and poor price momentum.

I don't actually know how long is now the time to buy financials has been part and parcel of every interview and while I have been underweight for ages, and still am, there is one aspect to this whole meltdown that we need to keep in mind.An aspect that could be relevant especially if one year or two year performance does not matter.Of the larger financial companies, will there be any that fail as a result of the entire event still unwinding? I believe Bear Stearns market cap topped out in the $20 billion range and if that is correct I would not say it was that large.Obviously some folks think there will be failures and with history as a guide there might be one or two which would not be a lot. Point ...