The Extraordinary Case of BoA's Missing $4 Billion & Other News You Can't Miss Today

OOPS, THERE GO $4 BILLION – If there's one business where you expect accounting to be flawless, it surely is a bank. Unfortunately not so at Bank of America, which credibility was shaken again yesterday when it revealed it holds $4 billion less than it thought. The bank reported the accounting error, which lasted through several years, to the Federal Reserve, which required it to suspend a share buyback and dividend increase plan until it remedies the problem. The financial solidity of BoA is not in question; its accounting chops are. As well as its board, its external auditor (PricewaterhouseCoopers), and the Fed itself, which gave BoA a passing grade in a stress test not two months ago. Incidentally, the accounting rule that tripped up Bank of America – admittedly a tough one for the layman to understand, having to do with the varying market value of assets and liabilities – is likely to be removed. No word yet on how the error was caught but the New York Times' account of what happened, if you manage to read it through, is a telling report of just how convoluted financial "innovation" has become.

A MARRIAGE OF CONVENIENCE – America drugmaker Pfizer is proposing a $99 billion marriage with its British rival AstraZeneca. But AstraZeneca is no blushing bride and has immediately rebuffed Pfizer, as it already had back in January. CEO Pascal Soriot says the company would rather focus on its current strategic rethinking and doesn't have marriage on the brain. It could also be AstraZeneca is playing hard to get to up the price. Pfizer has more even more to gain in a merger than new drugs, patents and cut costs: a British corporate address. By offering more than 20 percent of its stock to AstraZeneca shareholders, Pfizer can relocate for tax purposes in the UK, where corporate tax is at 21 percent (soon 20), vs. 35 percent in the US. The process, known as inversion, is gaining popularity of late among US corporations. Barack Obama's budget plan, now stalled in Congress, proposes to change the ownership ratio for tax inversion to 50/50.

KISS AND MAKE UP – Corporate America might soon rue the day these two made up. Activist investors Carl Icahn and Bill Ackman, who famously butted head over Herbalife, have ended their spat, according to the Wall Street Journal. (Spat is probably an understatement, given the two traded insults on live television in January 2013.) They had a 30-minute phone call, agreed to disagree on Herbalife and found common ground on other topics, while each "forgave" the other and apparently tried to play the part of the better guy. Better yet, the two might start investing together. "There is a much greater possibility that we are on the same side than the opposite," Ackman told the WSJ. Given the headache these two have been, separately, for executives at companies such as Apple, Dell, eBay or JC Penney, watch out for what they can get up to together.

FRIDAY NIGHT HEADLIGHTS – After more than 50 years in Southern California, Toyota's North American headquarters are moving to Plano, Texas. The automaker already makes most of its US-sold vehicles in factories in the American South (Texas, Mississippi, Kentucky, Alabama) and says it's relocating its office workers to bring the company closer together. But beyond the organizational advantages, moving to Texas is also a matter of culture and brand: Based in California, Toyota is the Prius company. In Texas, it can (or hopes to) finally figure out the truck market.

GOL – After House of Cards and Orange Is the New Black, Netflix is taking another well calculated risk in original programming by creating its first non-English-language show – in Spanish of course. The series, shot in Mexico by the director of a recent hit movie in the region– surely one that Netflix data showed to be popular –, will take place in the world of soccer, of course. We did say calculated risk. As Netflix grows into foreign markets – France and Germany should be next – it builds a library with about 20 percent local content, looking at what shows and films are pirated there to make their choices.

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