Last week, "financial Superman" Warren Buffett purchased $5 billion worth of Bank of America preferred stock in what was hailed as a "vote of confidence" in the bank and its operations. Not only has Bank of America's stock gone up 17 percent since the announcement, but three other major banks have seen their stock prices go up as well, suggesting the worst was finally over for the country's troubled financial sector. Experts worry, however, that Buffett's investment may end up eroding confidence not just in Bank of America, but in the banking sector as a whole.
KPCC's The Madeleine Brand Show invited ProPublica senior reporter Jesse Eisinger to explain the matter further on a segment that aired yesterday morning. The interview outlined Bank of America's financial troubles, including its disastrous decision to acquire Countrywide and a recent lawsuit filed against B of A by the state of Nevada. Eisinger also addresses why Buffett's investment could mean the worst for Bank of America and what could happen if Bank of America were to fail.
Listen to the full interview below. You can also read Eisinger's latest column, Bank of America Gets Buffetted.