Bank of America is one of the worst companies on the planet, making the Medellin Cartel look like Trader Joe's by comparison.
Yet for some reason the United States taxpayer has been told that he must send in cash to be poured into the company's coffers to help it pay its dividend and avoid a bankruptcy that would create systemic risk.
Browsing around for a savings account today, I had an idea about how Bank of America can raise capital. Take a look at the interest rates offered on savings accounts by various financial institutions, courtesy of BankRate.com:
- Flagstar Bank in Troy, MI: 2.28%
- Beverly National Bank Online: 2.28%
- Heartland Bank Direct in St. Louis, MO: 2.27%
- Goldwater Bank in Scottsdale, AZ: 2.24%
- Bank of America: 0.20%
So here's what happens: Bank of America goes crying to the federal government and says "We don't have enough money! We need more money and the market is so illiquid that we can't possibly raise cash! Wah, Wah, Wah!"
Hey Kenny (That's CEO Ken Lewis, America's favorite welfare brat), here's an idea: Maybe if you raised the interest rate on your savings accounts to something other than a sick practical joke, people would deposit their money with you and you wouldn't need to borrow money from Uncle Sam. Just a thought.
Meanwhile, the Wall Street Journal (subscription required) reports that "Starting with June account statements, any credit-card customer who carries a balance and has an interest rate below 10% will see his or her rate jump into double-digit territory. A company spokeswoman declined to provide an exact number, saying the changes would affect less than 10% of the bank's card customers in the U.S."
WalletPop covered the story this morning.
So let's recap: Bank of America pays people 0.20% percent on their money and then lends it out at interest rates over 10%. Then they plead for and actually receive a taxpayer subsidy and then turn around and raise people's interest rates on credit cards. Holy cow!
Ken Lewis made $24.8 million in 2007. No word yet on whether he keeps it in a savings account paying 0.20%.