Bank of America's $4B Blunder Comes at Worst Time
There are mistakes and then there are mistakes! A jaw-dropping $4 billion accounting error at Bank of America pulled its stock value down 6 percent in a single day and forced the financial firm to suspend plans to raise its dividend and buy back stock. The mistake, made in accounting data sent to the Federal Reserve, had been made for several years, and is an embarrassing blow to the bank's attempts to escape the shadow of the 2008 financial crisis. The firm says the error was caused by an "incorrect adjustment" related to bad debts the bank assumed when it acquired the troubled investment firm Merrill Lynch. It means the bank doesn't have as much good quality capital on hand as had been assumed. "The disclosure of the accounting error will most likely add fuel to the debate over whether the nation's largest banks are too big and complicated to manage," The New York Times says.
Google says cars it is programming to drive themselves have started to master the navigation of city streets and the challenges they bring - from jaywalkers to weaving bicyclists - a critical milestone for self-driving car technology. Google has set itself a 2017 deadline for getting "autonomous driving" technology to the public. But automakers are more skeptical. Instead, they have rolled out features incrementally, including technology that brakes and accelerates in stop-and-go traffic, or keeps cars in their lanes. "I think the Google technology is great stuff. But I just don't see a quick pathway to the market," said David Alexander, a senior analyst with Navigant Research who specializes in autonomous vehicles. Google project director Chris Urmson says in his blog, "We're growing more optimistic that we're heading toward an achievable goal - a vehicle that operates fully without human intervention." The benefits could include fewer accidents because most are now the result of driver error.
The numbers are still fairly small but America's sharing economy is growing fast. A new Harris poll for the American Institute of CPAs finds only 7 percent of U.S. adults have paid to rent or borrow someone else's car clothing or home. But 58 percent would consider using a sharing service. Airbnb, Zipcar and the clothing site Rent the Runway are among the most popular sharing websites. "Automobiles, homes, clothing, boats or any other goods or services" are being shared on these sites, CPA Ernie Almonte says. "If you live in the city it's hard to get access to a car and its very expensive for parking but maybe you only need it for two hours tonight."
Once they were deadlocked but now there's a proposed deal on a contact between the city of Detroit and several unions. The tentative agreement with the Coalition of Detroit Unions could speed up plans for Detroit to exit bankruptcy. A committee representing Detroit retirees already has agreed to endorse the city's plan to cut pensions in bankruptcy.
The price of regular unleaded rose 3 cents in the past week, the U.S. government says. The nationwide average for regulator is $3.71 a gallon, 19 cents higher than last year. "Refinery maintenance, which is beginning to conclude, is putting upward pressure on prices as refineries carry out that maintenance as well as summer gasoline to keep their air cleaner is also adding to costs," GasBuddy Senior Petroleum Analyst Patrick DeHaan says. But there could be some relief in sight. "Those refineries finish up maintenance in the coming week or two before boosting production," he says.
WATCH: America's Money - 'Paula Deen Show' - Bank of America's $4B blunder; Paula Deen's new show tour.
Richard Davies Business Correspondent ABC News Radio abcnews.com