Bank of America is one of the few banks that wasn’t hit by the subprime problem. The profit was very small vs the risk and it didn’t fit their model. Like internet stocks not fitting Warren Buffet’s model. Many laughed and called him too old for the new media. I am sure he was kinder when those stocks went bust. This put Bank Of America in the position to buy Countrywide after Countrywide had written off most of their debts.
There had been rumors in the last few days that Countrywide would file for bankruptcy. In the end they were bought. On mashable.com they talked about the advertising that Countrywide had been spending in the last few months and how that will change.
According to a Nielsen/Netratings assessment for the month of August, Countrywide spent $34.77 million on online advertising. Several months later, the company, still on its fateful decline, was then found to have increased spending considerably. In November, Nielsen showed it to deliver a total of $57.6m in its marketing efforts on the Web.
My assumption is they were trying to advertise themselves out of the problem. Now it is Bank of America’s problem but I think they are prepared for it. Fitting their model into Countrywide’s will obviously end a lot of their shaky practices.
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