This puzzles Mike Shedlock:

Inquiring minds who have been pondering the question "How the hell can Countrywide add to Bank of America earnings?" now have their answer.

Bank of America Will Not Guarantee Countrywide Debt Bank of America Corp., the second- biggest U.S. bank, said it may not guarantee $38.1 billion of Countrywide Financial Corp.'s debt after taking over the mortgage lender, increasing the likelihood of a default.

I didn't think you could actually do that. Neither did Yves Smith:

...a scheme by which Bank of America intends to acquire Countrywide (specifically, the FDIC insured entity) but leave the debt behind.
Now I am not a bankruptcy expert, nor am I current on the state of the art in M&A, but the intent of this deal flies in the face of a fundamental precept of well established practice. A huge no no is what is called fraudulent conveyance, and this deal is a clear, flagrant effort to do precisely that...

And he links to the Institutional Risk Analyst, who noted this back in May:

...if the Fed, OCC and OTS are willing to countenance a bank merger transaction where BAC does not explicitly stand behind the parent company debt of CFC, what does this say about the debt of other relatively small bank holding entities such as Washington Mutual and Capital One?

Now, of course, Ken Lewis and the BAC bankers may be playing chicken with all of us. If the threat of a bankruptcy by Red Oak drives down the secondary market value of the CFC debt, then BAC could buy it back at a discount rather than redeem it at par. If this is BAC's true strategy, then Ken Lewis is playing a very dangerous game indeed.

But how else do you explain BAC's refusal to make an unequivocal statement that they will stand behind the CFC debt? It is BAC's behavior, not the deteriorating financial condition of CFC, which is injecting potentially dangerous instability into this situation...