1) Why would BoA move their high quality rather than low quality derivatives to Merril?
2) Who decides on their quality, and can their opinion be trusted?
3) If they are high-quality now, will they become low-quality soon? For example, do they have EU debt crisis exposure?
4) What does this Bill Black know that led him to this conclusion?
5) How can we find out any of this information? Based on BoA's past behavior, you kind of have to assume the worst.
1) The only reason I could see for the high quality derivatives to be moved is if the moves are made on behalf of a particular party - internal or external - that would prefer them in a more credit worthy entity. Some groups have a requirements around the credit rating of the holder which could be the reasonable. 2) SEC would have the jurisdiction I assume. Whether their opinion can be trusted is another matter. 3) If I personally were evaluating the assets, then I would add the risk of EU sovereign debt crisis effecting the valuation. I'm not very good at valuation though :) 4+5) That's what I'm curious about - it's not information that would be available to the public. So I'm guessing he has inside information.