Chris Whalen, co-founder of Institutional Risk Analytics, says Bank of America, which has more than $100 billion in mortgage liabilities, can be saved if it declares bankruptcy.

"We're not going to take the bank down," Whalen tells King news. “Bank of America is not going to close."

Whalen believes bankruptcy is “the only sane way” of solving BofA’s problems so that it “comes out of the process restructured, ready to support growth, support leverage.”

Chris Whalen (Newsmax photo)

Whalen notes that Countrywide's bond trusts are worthless, were never properly constructed, and offer investors zero protection.

As Countrywide’s parent company, Bank of America is on the hook for its debt — and while BofA subsidiaries are well-capitalized, the bank can’t use their money to settle legal claims — leaving both equity and bondholders in serious straits.

The only sensible recourse, says Whalen, is to unmake hundreds of billions worth of bond contracts.

“I have all my money in Bank of America, my company, my personal accounts are all at Bank of America, and I have no concern because I know the folks at the FDIC will take care of it if they have to," Whalen says. "But I don't think we have to go there."

Northern Voices Online reports that Bank of America, which has seen steep drop in its share prices in recent days is planning a cut of up to 30,000 people in its workforce.

The job cuts, which could take years to implement, would represent 10 percent of the bank’s total work force.