Bank of America needs a capital raise to come from an angel investor, according to Jim Cramer.
The former hedge fund manager and market analyst told CNBC that it would help ease concerns if someone like Prince Alwaleed, a Saudi Arabian billionaire, invested a big chunk in the firm.
Alwaleed and Buffett acted like angel investors in Citi and Goldman when markets were concerned about their well being.
Cramer agreed that the problem with Bank of America is that no one really knows the extent of these mortgage issues, which is different than the issues that were plaguing Citi and Goldman.
But he offered the same solution:
“This is a 1990, 1991 solution, [like when] other banks were getting better [except Citigroup] and Citi got Prince Alwaleed to come in and make monumental buy investment, and Chairman Greenspan played a role in that.”
[Bank of America has been so stubborn and it’s just killed them to come out and say that they don’t need capital.]
“Bank of America needs an angel investor to come in and say, this is my chance to buy a big piece of America.”
We’d suggest BofA investor John Paulson, but given his recent performance, he might not qualify as an “angel investor” in the market.
Watch the video below.