So, Bank of America got 45 billion dollars in the bailout. Even spiffier, they've been borrowing money from the Fed for, well, nothing, and then buying Treasuries and garnering 3.5%
During one three-month period in 2009, Bank of America borrowed more than $48 billion at rates ranging from 0.25 to 0.5 percent. Meanwhile, the largest U.S. lender tripled its holdings of Treasuries and other taxpayer-backed debt to about $15 billion -- securities that yielded 3.5 percent.
source, Huffington Post
Neat trick, I wonder if the Federal government would lend me $48 billion?
So what do I get in the mail today? From this very bank?
Well, the very first credit card I ever got (I got a free pumpkin, it was Hallowe'en in 1994, I think, and I though "cool, a free pumpkin -- all I have to do is fill out this form"), I got from a little bank in California, probably CalFed or something like that. Unfortunately, over the years, the card issuer changed hands several times, and you know who owns my account now?
Well, guess what, it's Bank of America.
And today I got a little letter from them. It was friendly. It says:
Amendments to Your Credit Card Agreement
And then comes the really cool part:
Revised Terms as of June 25, 2011
Penalty APR and When it Applies: Up to 29.99%, based on your creditworthiness. This Annual Percentage Rate (APR) will vary with the market based on the Prime Rate. This APR may be applied to new transactions on your account if you:
(bullet point, isn't that helpful of them?) Make a late payment
How long will the Penalty APR apply?
If your APR's are increased for this reason, the penalty APR will apply indefinitely.
So, isn't that a great thank-you to the American people from Bank of America? Because I guess borrowing at .25% and getting 3.5% return just isn't enough. $45 billion wasn't enough. However much Fannie and Freddie bought (and we'll probably never know this) of BoA's and Merrill Lynch's dirt-worthless mortgages wasn't enough.
Bank of America needs to borrow at .25% and get 29.99% (let's not, by any means, round up).
And this Sunday's reading tip? May I suggest "All the Devils are Here"