bank of america reported a loss. the loss of subprime mortgages drag on results as the bank paid out $8.50 million in those who lost money in mortgage-backed securities. the ceo brian moynihan says the performance was strong without the one-time payment posting a profit of $3.70 billion. if credit costs, improved sales, and trading revenues, as well as higher asset management fees are just some of the areas of growth. well, for a closer look at that story in an update on the tuesday trading session, let's go to the trading session in new york. tell us what more caused t bad news for bank of america and how investors have reacted. >> bank of america is dealing dealing with so many issues that it is still putting some pressure on the stock, and what we have seen so far in the earnings season, they have to put less money aside for possible losses. it does stabilize the profits, but if you look at the revenue side, there are a lot of misses. especially if you look at the numbers from goldman sachs, it they are seen as qui

once again, we have bank of america, merrill lynch the winning bidder. on the next slide, slides 3, you can see all three sales. some of the bonds were the largest, $603 million. we had several bidders, and bank of america/merrill lynch once again the winning bidder there. to help put this into perspective for bank of america/merrill lynch, they have been one of our largest buyers since 2006, and the enterprise has been selling a great deal of bonds. about $1.60 billion total they have purchased, including what they have just purchased. this bid was to fund our hetch- hetchy facilities as well as our water in the city. citigroup global bought those, and then our bank of america/merrill lynch bought all of the re-fundings. so we premature cheap what was adopted as part of the last budget hearing. in that model, we had an average cost of borrowing. we achieved an average overall of about 4.48%, so we are pretty close. the items that also happens, the bond sale, moody's did downgrade us given our weakness. we had thought that would occur. moody's previously

bank stocks, and look at them, whether it's j.p. morgan. look at this stock chart. it's down for the year. look at wells fargo. same story. and of course, at bank of america or citigroup they're down for the year. do you see that trend changing. >> we don't have any apples in the bank. the challenge we look for in the back half of the year is continuing problems. a lot of problems were overhang on the bank stocks are gone. worried about these capital levels. we know some of that. a lot of stocks -- yet the big issue out there is what's going on in europe and the contagion is endemnick these large financial institutions. until we get resolution, it's going to be tough for these stocks to outperform the market. >> susie: given that all of these stocks are down, and i understand what you're saying in terms of the global economy, are there buying opportunities here? >> there are. if you look at the valuations, all of these big financial institutions are trading at compelling valuations. the real issue for investors is which is a value, and which is a value trap. >> susie: which are i recommending? >> we like j.p. morgan and wells fargo. looks like they've got

look at countrywide, look at bank of america. it's in trouble now because of its lending practices. >> yeah, i mean, you also have to remember that the mortgage-backed security, well, the residential mortgage was the lowest risk asset from a capital perspective. okay? and that's a big piece of why the banks went head first into this, why they leveraged it, why you took mortgage-backed securities, and then when you didn't have natural buyers for them, you took the tranches and bundled them into more leveraged instruments, collateralized debt obligations, and then multiplied that further and further. and if you look back in the e-mail files even of the financial crisis inquiry commission, one of the things you find is that there were other institutions that would have gone down because they retained risk which is one of my biggest problems with dodd-frank is you've got this risk retention rule which essentially says we should have these institutions retain risk on the notion that, certainly, if they have to drink the poison, they're

morgan is close to swapping places with bank of america as america's biggest bank by assets. analysts have been getting more cautious on banks as earnings season begins. j.p. morgan is the fist of the banks to report on thursday. wells fargo was among the weak banking stocks off more than 1%. wells is the latest bank to settle claims from investors losing money in mortgage-backed securities. in this case, it has settled with pension fund investors. several other similar lawsuits remain however. google stock was searching for buyers. shares fell 2.7%. a couple of things today for google. first, morgan stanley's analyst downgraded its view of the stock to equal-weight. the analyst is not convinced google's spending on hiring and compensation will pay off. and just before the closing bell, the company said chairman eric schmidt will testify in september to the senate anti- trust committee. last month, the federal trade commission launched a broad look into the company's business practices. google's second quarter earnings are due next thursday. as one may expected after the disma

as president of global wealth and investment management at bank of america, she oversees more than $2 trillion of assets for clients at merrill lynch and u.s. trust. our conversation began with her take on the stock market for the second half. >> the u.s. economy will continue to muddle its way through for the remainder of the year, and the return on equities will be positive for the remainder of the year. >> sallie, what is your take on the economy? so many people say the u.s. economy is in for a prolonged slow-down. >> not atypical after we see see a financial crises. our clients are affluent, high net worth, ultrahigh net worth clients. we see that they continue to feel very conservative, that they're deleveraging as a group. that's important, because these folks start businesses, run medium businesses, small businesses or corporate executives, and their conservatism feeds through to the rest of the economy. >> do you think that stocks will still prove to be a good investment in an economy that's going to be weakened with high unemployment? >> it is a fallacy in many ways, the beli

> what ever mess there was it is all gone by now we are at 18th and castro if you look at the bank of america there is all whole through that window. protesters grab whatever they could an attack whenever they could and the bank of america would just happen to be one of the targets. this is a normal pickup day for garbage you have no idea at one point hundreds of protesters were going through this people have been walking up to me in asking me what happened? >> ken as harding did have that a gunshot residue on his hand that supports reports that he was the first one to fire shots at the officers officer shot back nine times. >> jim rescue rangers will continue the search for one hiker who is believed to of gone over a waterfall. they sought someone walked into the water and go over the falls yesterday afternoon it is a 317 ft. waterfall because of the high record snowfall the waters have become rapid and i. >> the borders supervisors voted to increase the rewards from 10,000 to 25,000 for information concerning his beating. he was in prison because of unrelated charges. according to his famil

this is the group that includes bank of america, j.p. morgan and citi. but there's a catch. take out bank of america, and earnings for the group are expected to rise 23%, better than th8% gain for the overall market. against that backdrop, analyst jim sinegal says now is a good time to buy select financial stocks: j.p. morgan, wells fargo and u.s. bancorp. >> we think that if you stick to high quality names, at current prices, current earnings, and most of their capital problems behind them, we think they are one of the best sectors in terms of investment opportunities. >> reporter: but burt white of l.p.l. financial warns it's too risky to buy any bank stocks now. >> we think that there are way too many questions and just not enough answers, between housing and foreclosures and the euro crisis and regulatory reform. plus, just some of the simple negatives like a flat yield curve and zero interest rates, so they can't earn money on money market reserves. >> reporter: those concerns have weighed on stocks in the sector. the b.k.x. index of bank stocks has fallen nearly 20% fro

and these other banks have parked on to the balance sheet of the fed and you return them back to where they came on to the balance sheet of bank of america goldman j.p. morgan their book value would be zero these are not really banks these are financial hole the grounds that exist only in the figment taishan of psychotic central bankers like ben bernanke who are off their meds. once we get to psychotic and we see the true nature of a ben bernanke i fully expect him to run naked around ron paul swinging a tambourine and singing some old carpenter song. while having his entire body waxed by dominate jerks that's pretty much all we can look forward to what is next congressional testimony you know you create the problem in order to sell your product right so let's look at these final headlines europe is tanking as the words selective default hit the wires that was first thing monday morning the euro tanked gold in euro soared and then out from brussels the meeting in brussels came this tweet from the telegraph the new jargon buzz phrase here in brussels is ten. rather than selective default what does that mean and what the telegraph journali

bank of america the likelihood is your contractors mortgages not even held by bank of america. it's held by mortgage-backed and those investors have to be considered. bank of america is a surface or who also owns the largest portfolio of second liens and home-equity lines and so there's risks to them on that depending with the door on the first mortgage and so you're right that this is a problematic situation and the government isn't interested in dealing with it but one of the things they are not willing to deal with is before you can have in the example bank of america treat the borrowers well, they need to be armed conflict in the relationship between the second liens they hold on the balance sheet and first liens have a service for people like the contractor. >> thank you. >> i have a couple questions. right now what looks like fannie and freddie might be profitable by the industry to of going into 2013 setting aside the 10% dividend they might own to the treasury, and at that point i'm sure there would be pressure to bring them out of the conservatorship but there you have

there are two outstanding recommendations for bank of america. but asked for changes to the lease, which is scheduled to expire august 16, 2011. cash handling audit of security office -- access office. there are three outstanding recommendations. the airport has decided not to fully implement two of them due to staffing constraints. one of them is inadequate activation of duty. while again we understand we have limited resources, we are asking that the airport confined other mitigating ways to assist in this area. thank you very much, sir. supervisor campos: thank you. if i may, i just have a general question about the process. once you complete an audit, how is the process supposed to work in terms of a response from a department? >> once we complete an audit and we issue the draft audit, we are requesting a response. once we have issued the draft audit and we're all in agreement or we agree to disagree that this is what is going into the report. at the time of receiving that, generally the department has two weeks to respond to the audit. once w

side can get the word out to the banks and the banks would see it's a big problem. >> we asked bank of america accounts remain open despite complaints about him. the bank told us we don't close account based on accusations from a third party. we cooperate with law enforcement. american airlines tells us we first learned of mr. pabst scam late last year and other passengers called thinking that they had tickets, too. but american said it shut down pabst frequent flyer act in december and bank of america shut down his bank account after cyrus' complaint. >> that was crazy pain. i didn't stop everybody in the world, but i did stop him. >> san francisco police are investigating this case as a financial crime and they want you to be warned. so if you see a low-cost deal online, let it raise a red flag. make sure you have the item in hand before you pay for it. remember, making an airline reservation doesn't mean you have a ticket. i'm michael finney, 7 on your side. >> up next, a clean energy vehicle of a different kind. this one runs on nothing but air. >> carolyn: when we talk about low emission

side can get the word out to the banks and the banks would see it's a big problem. >> we asked bank of americacounts remain open despite complaints about him. >>. the bank told us we don't close a account based on accusations from a third party. we cooperate with law enforcement. and we learned of had late last year and other passengers called thinking they had tickets, too. but american said it shut down pabst shut down his frequent flyer account in december and bank of america shut down his bank account after cyrus' complaint. >> that was crazy pain. i didn't stop everybody in the world, but i did stop him. >> san francisco police are investigating this case as a financial crime and they want you to be warned. so if you see a low-cost deal online, let it raise a red flag. make sure you have the item in hand before you pay for it. remember, making an airline reservation doesn't mean you have a ticket. i'm michael finney, 7 on your side. >> up next, a clean energy vehicle of a different kind. this one runs on nothing but air. [ man ] did we get anything good? sweetie i think you need a little

. >> bank of america locked her online account. and apparently closed two of her accounts. so, she went to the bank to try to sort out the multimillion- dollar makes up in person. >> they would not give me any of my money and said they were in the process of closing my count and they would send me a check in 10 to 15 business days. >> tanya says that is too long to wait. her unemployment pay and child support is deposited into our account and rent is due friday. >> i struggle to do my best for my kids. now we will be homeless because i cannot get the money. >> a bank of america tells us it appears to be a very isolated incident. >> they have caused more into a family struggling already. >> a tough situation. bank of america has agreed to keep one of her accounts opened, giving her access to a small amount of money, while it investigates exactly what happened. as people use credit and debit cards more and more, the flow of cash has slowed. one type of bill has exploded in usage, $100 bills have exploded. >> school administrators are focusing on the districts with the highest

he filed complaints with the american airlines and bank of america america and he called me at 7 on youride. >> 7 on your side get the word out to the banks and the banks would see it was a big problem. >> we asked batching of america why his accounts remain open. the bank told us we do not close accounts based solely of an accusation by a third party. american airlines said we first learned of the scam late last year when other passengers called thinking they had tickets, too. american shut down paps frequent flyer account in december and bank of america shut down paps' bank account after his complaint. >> i can't stop everybody in the world but i did stop him. >> they are investigating the case as financial crime. they want you to be warned. if you see a low cost deal on line let it raise your a red flag. making an airline reservation doesn't mean you have a ticket. >>> up next a clean energy vehicle of a different kind. this one runs on n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n

look at country wide, look at bank of america -- it's in trouble now because of its lending practices yeah, i mean, you also have to remember that the residential mortgage was the lowest risk asset from a capital perspective, okay? that's a big piece of why they went into this, why they lev ramminged it -- lev ramminged it and when you didn't have buyers for them, you took the tranches and bundled them into more debt obligations and then multiplied that further and further, and if you looked back in the e-mail files of the financial cry, one of the things you find is that there are other institutions that would have gone down because they retained risk. you have a risk retention rule saying we should have institutions retape risk on the notion that certainly if they drink the poise p, they won't feed it to others. they didn't realize what they were serving up was poisen and what you saw in 2007, you saw institutions bear was ignoring it, merrill didn't realize the exposures until in hot water with goldman and others still many had problems, were quickly trying to off load what they ha

. >>> bank of america has agreed to help californians who are facing foreclosure.it is joining the state's keep your home california program. that program began in february but so far only 500 homeowners have had up to $100,000 shaved off their principal. state officials hope the inclusion of bank of america will help them reach far more homeowners. >> we are looking for people who are delinquent on their loans or having trouble are unemployed or under water. >>> the federal government has given $1 for every dollar. >>> and the whale may have treated its own health concerns, ken pritchett. >> reporter: after a month why doesn't she as her calf did last saturday swim back to the ocean just a few miles away. >> how is she going to get out? >> and how long can she survive. >> these are those questions that we have no idea. we haven't had many whales up rivers so we don't know what to expect. >> reporter: the whale was showing signs of growth on her skin, a concern when whales are in fresh water for too long. >> in the last couple of days, it sort of disappeared so may

however, the citation was issued to bank of america. still, the a.c.e. organizers say their goal is to hold all banks responsible for the properties they own, and that is the law in the city of san jose. in 2009, the city adopted a zero tolerance policy for blight. since then the city has issued nearly 300 citations to banks alone adding up to nearly $400,000 in fines. >> a vacant property is an attractive nuisance. i'm concerned that if a vacant property is not investigated right away, you know, we could have the homeless, we could have gang, we could have other parties breaking into the property. so we investigate these complaints within 24 hours. >> reporter: we did contact wells fargo. it said that it is only the trustee and not responsible for maintaining that property. bank of america is, in fact, the property or rather the bank in charge of maintaining the property. it says that it will remedy the situation within 48 hours and will stay on top of the maintenance at that property and its other bank-owned properties around san jose. within 48 hours,

banking branch is maintaining foreclosed homes. about 20 members of the community organization took three small trash bags into the branch. the garbage came perfect a property own bid wells fargo, serviced by bank of america. san jose code enforcement say they're going to fine owner who's don't properly maintain properties. bank of america tells abc 7 news it will pay fines and clean up property within 48 hours. >>> a sacramento woman faces charges tonight for excessively dialing 911. chp arrested the 44-year-old jennifer today for making nondrg emergency calls to chp command center in sacramento. police say in june she called 911 a total of, ready for this? 2147 times, all nonemergency calls. on the 4th of july she accused of calling 180 times. today the chp says it received more than 130 calls. she's charged with unlawful use of 911. why she's allegedly doing it, unknown at this point. >>> and low income residents of san francisco now have a healthier option for using their food stamps. the heart of the city farmers market in the civic center is searching for -- reaching out, rather to neighbors for offering healthy food options and takes cal fresh cards, and organizers want to make sure everyone takes

since the beginning of july, bank of america is down 11%. the big loser of the dow was united technologies, the company behind otis elevator, carrier air conditioners and pratt and whitney jet engines. shares fell almost 2% on heavier volume. two weeks ago this stock was at an all-time high. earnings were strong and the firm raised its forecast. its chief financial officer say they're seeing a broad-based recovery. a couple of merger stories. clorox regained more than 2.5% as investor carl icahn increased his buyout price to $80 per share. that's now what he's offering. earlier this week, clorox said no to an offer of $76.50 per share. the stock here continues trading below even that lower offer as the market seems to be skeptical of a deal. meantime, it is a deal for chemical company nalco. the offer is $38.50 from eco- lab. shares jumped more than 24% on big volume but settled below the purchase price. part of that difference can be explained by the drop in the stock of the buyer. since it is offering either cash or stock, a drop in its pri

morgan and bank of america held the dow industrial gains in check. j.p. morgan slid more than 1%. bank of america fell more than 2%. the worst dow stock today. investment bank morgan stanley dropped almost 2%. 1.8%. concern is building among analysts that quarterly earnings expectations will be down from last year due to a drop off in trading revenues. trading activity has been hit by the greek debt crisis, the drop in commodity prices from earlier this year and new regulations. morgan stanley stock is only about $1 off a 52-week low hit in early june. transportation stocks were a standout in today's market. this e.t.f. follows the dow transport index, and it hit a new high today-- up more than 1% on heavier-than-usual volume. this is an all-time high. trucking stocks especially helped the sector. arkansas best jumped 10.5% after raising its freight rates. some optimism there it will stick. con-way and old dominion freight saw some ripple-effect buying-- more more than 5.5% and 3.5% respectively. a lot of those trucks can be headed toward retailers, and store stocks saw buying inte

we don't need to look any further than the biggest bank by assets in the u.s., bank of america. shares of b. of a. fell more than 3.25% and volume was heavier than usual. the drop sinks bank of america below its lows of last month, down to its lowest price since may, 2009. this was the biggest loser among dow industrial stocks today. other big banks hit today-- citi falling more than 5%. morgan stanley dropped over 3%. this is a 2.5-year low for morgan stanley. and j.p. morgan fell more than 3%. uncle sam's i.o.u.s continue to be a port in the storm over europe. the interest rate on the 10-year government note fell back below 3%. as rates drop, bond prices rally. it puts the yield just above its june low. the uncertainty hasn't hurt dealmaking. coal miner peabody is teaming up with global steel maker arcelor mittal. they have a $5 billion offer for australian coal company macarthur. this company was the target of a bidding war last year, but talks collapsed. macarthur is a key producer of coal used for steel making. peabody shares fell 3.5%. when peabody made its play for macarth