CHESSNOID

The stock market had a crazy ride today plummeting up to 800 points at one point and rallied back to only a minus 369 points. The psychological point of 10,000 has been shattered, and now it is hard to say which way the market will go tomorrow.  This is on the heels of the bailout.

What’s unusual is that BofA came out today with some crazy news that profits are down and losses are up.  This is the company that took over Countrywide overnight in a back room deal brokered by the Fed. At least that is what I suspect.  Banks and financial companies don’t just merge overnight without stockholder approval like the way these companies did.  As far as making money, Bank of America is no longer profitable.

Results by Unit

The bank reported $3 billion in managed net losses for the quarter from its credit-card unit. The investment bank’s income rose 22 percent to $474 million. The unit took $952 million in charges tied to collateralized debt obligations and $327 million in writedowns tied to leveraged loans and commercial mortgages. The business also had $190 million in losses on a commitment to buy back auction-rate securities from clients.

Retail deposits advanced $56 billion to $586 billion in the quarter, boosted by the addition of $35 billion from Countrywide. Much of the increase occurred in September from the “flight to quality,” in which depositors seek out banks seen as safe places to store cash as other institutions fail, Chief Financial Officer Joe Price said on a conference call.

Bank of America will assume $21 billion in debt owed by Countrywide, Price said, marking the lender’s first confirmation of its plans for the holdings. “It’s been very consistent with deals we’ve done in the past,” Price said.

I can only wonder how the market will react tomorrow with this news. Good news seems to make the market go down and bad news push it up lately. Let’s watch and see if the market bounces back up over 10,000 or start to close in on the 9,000 floor.

I am not sure why BoA announced this news a week earlier, but I have a feeling it has something to do with snagging some of that $700 billion bailout money that Congress is giving out.