Jonathan Weil wrote the commentary, Bank of America Edges Closer to Tipping Point, which I found on the Bloomberg web site.

Judging by its shrinking stock price, though, investors are acting as if Bank of America is near a tipping point. Its market capitalization stands at $115.6 billion, or 54 percent of book value.

The problem for anyone trying to analyze Bank of America’s $2.3 trillion balance sheet is that it’s largely impenetrable. Some portions, though, are so delusional that they invite laughter. Consider, for instance, the way the company continues to account for its acquisition of Countrywide Financial, the disastrous subprime lender at the center of the housing bust, which it bought for $4.2 billion in July 2008.

Here’s how Bank of America allocated the purchase price for that deal. First, it determined that the fair value of the liabilities at Countrywide exceeded the mortgage lender’s assets by $200 million. Then it recorded $4.4 billion of goodwill, a ledger entry representing the difference between Countrywide’s net asset value and the purchase price.

That’s right. Countrywide’s goodwill supposedly was worth more than Countrywide itself. In other words, Bank of America paid $4.2 billion for the company, even though it thought the value there was less than zero.

Since completing that acquisition, Bank of America has dropped the Countrywide brand. The company’s home-loan division has reported $13.5 billion of pretax losses. Yet Bank of America still hasn’t written off any of its Countrywide goodwill.

Consider this post along with my previous post, Financial Improprieties Abound as Stocks Rally. I hope there won’t be any buyer’s remorse when the Republicans in the House get to deal with the second leg of the impending banking disaster.  Nah, the voters will just blame Barney Frank.

You might also want to consider The Best Way To Rob A Bank Is To Own A Politician,

After my experience in the US Army back in 1967-1969, I came away with the conviction that every citizen should experience being in the military.  I figured that about two weeks of that experience would give you all you needed to know.  More than that was unnecessary.

In basic training we were explicitly told that the purpose was to break us down so that we could be rebuilt as soldiers.  It makes sense if you think about the need to get rid of the ordinary human resistance to killing another human being.  Of course demonizing the enemy was only part of the process.

I resisted such indoctrination, but I realized that in resisting it, I would fail to become an effective fighting man.  Thank goodness I was permanently assigned to Frankford Arsenal in Philadelphia, PA. Had I been sent to Viet Nam, I probably would have gotten myself killed in the first 15 minutes of an engagement with the enemy.

However, people returning from war who had been turned into effective soldiers have a real problem.  How do they get back their civilian minds that were broken down by the military training? It wouldn’t surprise me that this struggle is not always waged successfully. After all there are no 8 weeks of training at the end of a military career to undo what was done in basic training at the beginning of that career.

I don’t want to detract from my previous post, Reconsidering George Bush’s Memoir, by leaving the impression that my Army experience is the only one I had to justify the  following comment that I made in that post:

If you read the book “The Shock Doctrine” you will learn how the idea of destroying a person’s mind came to be an acceptable goal in psychiatric circles. I know some of this information first hand without having to have read it in the book.

What I have written is not a criticism of the basic training in the army. I stated why I knew it was necessary. Also note that I am not making a special criticism of the U. S. Army.  That is the only military experience that I have.  I don’t imagine it is any different in any other military organization because of the military necessity of training an effective fighting force. However, it is important that the military and the citizens who delegate the job to them understand the full consequences of sending people off to war.

In my previous post, Bush on waterboarding: ‘Damn right’, I quoted from a news article quoting from George Bush’s memoir.

The former president writes, “His understanding of Islam was that he had to resist interrogation only up to a certain point. Waterboarding was the technique that allowed him to reach that threshold, fulfill his religious duty, and then cooperate.” Bush elaborates that Zubaydah gave him a direct instruction, “‘You must do this for all the brothers.’”

I asked why Bush wasn’t suspicious that this instruction from Zubaydah had been coerced from him.

I may have to give credit to the Cheney forces for some humanity after all.  Perhaps they didn’t coerce Zubaydah into making that statement.  Perhaps they were kind enough to just lie to the President about it.

I can picture it now, Cheney turns to an aide and says, “Bush is about to go soft on torture.  What can we do to ease his conscience so that he doesn’t take to drink again?”

The aide and Cheney hatch this plot to concoct this unbelievable directive from Zubaydah.  They knew that Bush was so troubled by what was going on that he would grasp at any straw to assuage his guilt.

Remember that Zubaydah’s attorneys said that after Zubaydah’s 83 waterboardings,  Zubaydah’s mind had been so destroyed that he was unable to contribute to his own defense.  Yet we are to believe he wrote a lucid directive to President Bush? Maybe it wasn’t humanity on Cheney’s part, maybe they couldn’t get anything more from Zubaydah.

If you read the book “The Shock Doctrine” you will learn how the idea of destroying a person’s mind came to be an acceptable goal in psychiatric circles. I know some of this information first hand without having to have read it in the book.

Anyway, Cheney and his aide were probably horrified to see this line published in his memoir.  They knew that people with a clear conscience wouldn’t fall for such nonsense.

This only apparently applies to people with clear conscience.  Even Bush’s main speech writer repeated this nonsensical claim in a debate moderated by Christine Amanpour.