So how far will Brian Moynihan go to undo the legacy of his tainted predecessor, Ken Lewis, who left the bank on the brink of ruin for Moynihan to rebuild? The CEO of Bank of America faces an array of challenges that presents the opportunity to do something dramatic.

The recent U.S. downgrade downdraft and the rising angst over the costs to settle a never ending stream of MBS disputes have pushed Bank of America stock down 35 percent since the beginning of August. For the year, the stock is down 50 percent. It's now trading at about 35 percent of book value, which is shockingly low even by current bank standards. Tellingly, analysts are now talking about the need to raise capital again, something Moynihan and other executives have previously said was unnecessary.

Bloomberg, via the Washington Post, delves into an intriguing possibility: Why not sell Merrill Lynch? That would certainly obviate the need for selling additional shares. One analyst, no less than Mike Mayo, suggests that the wealth management unit may be worth $50 billion. If the stock continues to swoon and earnings fail to meaningfully rebound, Moynihan may have no choice but to at least consider a spin off, to return value to shareholders. Such a move would leave Bank of America to focus on its core franchise, retail banking.

One issue here is the extent to which the integration occurred in meaningful ways. The bank has been touting the synergies between the thundering herd and the core retail banking operations, but there are many skeptics of such claims. Moynihan will likely face some questions related to the need to raise capital when he faces investors in a hedge fund that remains heavily invested in the declining stock. Could be interesting.

For more:
- here's the article

Related articles:
Moynihan struggles to turn Bank of America around  
Brian Moynihan finally putting the Countrywide fiasco behind him