October 16th, 2009
03:43 PM ET

Financial Dispatch: Bank of America posts loss and CEO forgoes pay

[cnn-photo-caption image=http://i2.cdn.turner.com/money/2009/10/16/news/companies/ge_earnings/general_electric_hq_sign.03.jpg caption="GE reported sinking profit and sales, but said it sees signs of stablization."]

Andrew Torgan
CNN Financial News Producer

Bank of America proved no match for the ongoing recession as the nation's biggest bank reported a steep loss today.

With Americans continuing to default on their credit cards and mortgages, BofA said it lost $2.2 billion in the third quarter, which included several charges related to the government's move to rescue the firm over the past year.

The results come at a particularly difficult time for both the bank and its CEO, Ken Lewis.

Last month, Lewis announced plans to step down amid ongoing scrutiny over his role in the company's controversial purchase of Merrill Lynch during the height of the financial crisis.

And just yesterday, he agreed to a deal not to accept a salary or bonus this year as CEO in an effort to deflect some of scrutiny the firm faces, after some not-too-subtle prodding from the Treasury Department's pay czar, Kenneth Feinberg. In fact, Lewis will have to repay Bank of America the more than $1 million he has already earned in his final year on the job.

GE sees signs of stabilization

General Electric continued to get hammered by its troubled financial unit, but the conglomerate's widespread cost-cutting measures and a strong showing from its consumer and industrial units helped GE's profit beat Wall Street's expectations.

The company said it was also starting to turn around its GE Capital finance unit and began to see signs of stabilization across the board.

GE said its third-quarter net income fell 44% to $2.4 billion, while sales fell 20% to $37.8 billion Results included a charge of $600 million for restructuring and cost cutting.

Military ranks swell with Jobless

The nation's armed services wrapped up a record year for recruiting as a weak job market and bigger bonuses trumped two ongoing wars.

The Department of Defense says it met or exceeded its recruitment goals for all branches of the military for fiscal year 2009, which ended Sept. 30, for the first time since 1973. That’s when the draft ended and U.S. forces withdrew from Vietnam.

Bill Carr, deputy undersecretary of Defense for Military Personnel Policy, acknowledged that the high level of unemployment in the civilian job market was helping the military draw recruits, and the earning power of recruits puts them in the top 10% of workers of commensurate age, education and experience.

Recruits typically earn $1,399.50 a month as they undergo basic training during their first few months in the military, according to the DOD. Most enlisted personnel can expect to earn $1,568.70 a month by the end of their first year, which translates into an annual salary of $18,824.40.

Wal-Mart and Amazon.com in price war

An online book special offered by Wal-Mart turned into a full-fledged price war with Amazon.com in just the last 24 hours.

Wal-Mart fired the first shot on Thursday, offering $10 prices on a handful of upcoming hardcover releases, including former Alaska Governor Sarah Palin's “Going Rogue” and John Grisham's “Ford County,” a discount of about 60% from the regular price. Wal-Mart’s also offering free shipping.

So then Amazon.com, the largest online bookseller, matched the $10 price, in turn prompting Wal-Mart to take its offer down to $9.

By this morning, Amazon.com also had priced the books at $9.

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Filed under: Andrew Torgan • Economy • Military
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