Bank Of America (NYSE: BAC) now stands as a symbol of the U.S. banking system, so it better not fail. Its CEO Ken Lewis decided not to take a bonus after taking $15 billion worth of taxpayer money from the TARP -- not to mention the 66% decline in its stock in 2008. Last month it closed its purchase of another icon, Merrill Lynch & Co., and today it sold a $2.83 billion stake in a Chinese bank. Does it have enough capital now? It's hard to know.

Today's capital raising move looks good on the surface. Bank of America sold 5.62 billion Construction Bank shares at 3.92 Hong Kong dollars -- that amounted to $2.83 billion in proceeds and a profit of about $1.13 billion on the stake sale, based on Construction Bank's initial offering price. (Bank of America now holds 16.6% of the Chinese bank.) But Bank of America sold that stake at a 12% discount to the stock's Tuesday close -- and that makes me nervous.

Why? Because it ought to be able to sell at the market price by breaking that sale into small lots and executing it over a relatively long period of time. Its decision to sell at such a huge discount hints at desperation. It is difficult to know what kind of financial shape Bank of America is in because it has not released financial statements following its merger with Merrill Lynch. At the end of September it had $11 of assets per $1 of equity, but when it bought Merrill it probably added a significant amount of debt and the potential for big asset write-downs.

I'd guess that Bank of America could use much more capital -- but just how much more it needs and where it will get that money is hard to know.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.