Subject: Re: The cover in todays Barron's, banks,
' Bank of America's are the largest. The bank had a paper loss of $109 billion at year end on a $632 billion portfolio of mostly federal agency mortgage securities with maturities of over 10 years. They are carried using held-to-maturity accounting. The bank intends to hold its hold-to-maturity securities to maturity. Those bonds carry an average rate of just 2%, way below current market rates on securities of 5%.

Buffett must have been confident in BAC (10% of Berkshire's portfolio at year end) but positioned Berkshire for interest rate increases.

Is there more to this story? Be nice to hear Buffett's take on it.