Wall Street Rumor: JP Morgan to Take Over Bank of America Within the Week

*Update- While Zerohedge is describing this rumor as "idiotic" we now have an official denial of the rumor from BOA:

• BANK OF AMERICA SAYS JPMORGAN MERGER SPECULATION IS `BASELESS'
• BANK OF AMERICA DISCUSSES MERGER SPECULATION IN INTERNAL MEMO
• BOFA REPEATS IT HAS NO NEED TO ISSUE ADDITIONAL COMMON STOCK

We seem to recall a quote regarding official denials- Believe nothing until it is officially denied.

Does this mean the take-over is imminent, or just an "idiotic rumor" as per Zerohedge?

The Zombie that is JPM must be fed. 
Assets acquired for nothing in the Bear Stearns looting (acquisition) have been burned and the sharks must now turn and feed on each other.
The two financial arms of the US gov't (JPMorgan and Goldman Sachs) will be assisted/preserved at the cost of every other bank and financial institution if need be.
If JPM or GS goes under, so does the $1 quadrillion credit default swap interest rate suppression scheme, and with it, the US dollar.

From 24/7 WallStreet:
There is a rumor circulated on Wall St. that JP Morgan will take over Bank of America within the week. The government will support the deal with a $100 billion investment in preferred shares issued by the combined entity. Alternatively, the government may guarantee the value of a large pool of Bank of America assets. The word is that Treasury Secretary Geithner has discussed the transaction with JP Morgan CEO Jamie Dimon. The “merger” would completely destroy the value of BAC’s common shares.

Under federal law, JP Morgan and Bank of America could not combine because together they would have too large a share of several financial markets in the US. Treasury would apparently work with other government agencies to have those rules suspended and then the new combined bank would sell assets to get back into compliance later.

Note: Credit default swap insurance on the bank’s unsecured debt jumped 64 basis points to 435 basis points, meaning it would cost $435,000 per year for five years to insure $10 million in bonds, according to Markit (via Reuters)