Michael Gracie

When I first read the headline, I thought fair enough - if Bank of America backs out they should pay a breakup fee.

But alas, it’s Countrywide that will be doing the paying.

Potentially scary for the troubled mortage lender. While we don’t have full details, you might expect to see some type of minimum net asset clause and/or litigation contingencies in the deal sheet, meaning if Countrywide happened to have more skeletons in the closet they would wind up paying for it.

UPDATE: The Wall Street Journal agrees, and also notes that Countrywide stock price reflects a decent amount of skepticism.

Trading Rule #1: Never, Ever, Ever, Under Any Circumstance, Add to a Losing Position.

Yep. Number two would cut losses quickly, and number three would be double up on your winners. Even casual casino gamblers can win, if they do this while understanding and following game fundamentals.

UPDATE: The deal is now underway - it’s an all equity transaction at a hair under one share of B of A for each five shares of Countrywide priced out at around $7.20. CFC fell to $6.33 by the end of the day today, which could suggest some think the transaction will wind up more dilutive to B of A shareholders than management does. Meanwhile, Robert Shiller is questioning the whole deal - you can’t help but believe such skepticism has a solid foundation attached when it comes from him.

PNC Bank of Pittsburgh has noticed phishing emails bearing its name floating around, and is warning customers about it.

All I can say is “right on” - it is always good to see financial institutions taking proactive steps to protect their customers (particularly as the bank winds up paying for it in the long run, and passing the costs of fraud onto all customers in the form of higher rates and fees).

I’ve noticed other banks trying to head this problem off; CompassBank puts fraud warnings on their login pages, and Bank of America has gone with a funky multi-step login process, complete with image identification, that would be damn hard for a phisher to duplicate.

Now if my bank would only do the same.
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It took a while, but despite Bank of America’s public relations move in the security realm, they are not going to escape the legal system over their massive customer data “leak.”

After notifying each customer for which data was pilfered and offering free credit monitoring services, they are finally getting sued.

Hot on the heals of handing a pile of data over to crooks, Bank of America is launching a new identity theft protection initiative targeting users of their internet banking services.

The new service, dubbed SiteKey, uses a combination of an image, user-created phrase and three challenge questions to authenticate both the customer’s identity and the authenticity of Bank of America’s Web site when customers log on.

Techdirt called the reaction to identity theft misguided, and I have to say that this latest from Bank of America seems right in line. Create some spin around the lack of internet security and how you are going to solve that, while customer data flies out the back door.