These guys keep rehashing the same old news. Bailout this and bailout that. On the verge of bankruptcy. It is enevitable, can't be avoided, and taxpayer is going to get stuck.
BAC is moving assets and liabilities around for maximum business advantage and the Federal Reserve has allowed them to do it. 'Nuff said.
If you start with the premise that BAC is going to go bankrupt then anything they do leads to suspicion and alarm that they will somehow need and get a bailout.
First of all the premise is wrong. But second, and most important, if BAC is insolvent then taxpayers will pay. There is no two ways about that. They'll pay whether it is the holding company that defaults or not. AIG had many profitable and secure divisions, but when the holding company went bankrupt the government provided 100's of billions of dollars. It is the same with BAC - if they go under it won't matter what kind of financials transfers were done before hand - the government will be involved in setting it straight.
Assume BAC isn't going bankrupt. Why would they move these derivates. First of all it appears this is standard operating procedure at all the big banks. Since BAC acquired ML I suspect it is something they had been planning to do for some time. The downgrade may have accelerated the action. It doesn't have to be a mysterious or nepharious reason. IF the downgrade was going to require more capital and moving the derivates to the banking side of the business reduces that need then it is a good business choice. The Fed agrees.
There isn't enough money in this country to pay for a BAC bailout so I don't know how that happens unless Uncle Ben fires up the printing presses to maximum warp speed in which case the dollar won't be worth a penny.