Anyone notice how quiet the media’s been on the amazingly fast collapse BofA? If there was a government backstop on the CFC deal, they’re going to need to use it. Wouldn’t be surprised if they sell Merrill too, but not sure who’d buy them. Jackson Hole better go well or this time next week BofA could be SOL.
you can bet your bottom dollar boa is in constant talks with Geitner et all…its funny once again AIG threatens to take down the entire US financial system…i went in on BAC @ 6.75 aaaah well
@pimpin, If you’re intent on losing money purchasing BAC; why don’t you just cut out the middle man and give me a few G’s? @Sweep, How is BAC SOL? What makes you think BAC wouldn’t just do what Citi did, a reverse stock split, to maintain price levels? Isn’t your call of demise severely premature?
A reverse stock split does nothing to raise capital, of which BAC is rumored to need plenty of. The equity market solution would be a stock offering, which isnt exactly tenable sub $7.
Zesty Wrote: ------------------------------------------------------- > @Sweep, How is BAC SOL? What makes you think BAC > wouldn’t just do what Citi did, a reverse stock > split, to maintain price levels? Isn’t your call > of demise severely premature? It’s not a stock price issue, it’s a capitalization issue. They’re not going to be able to support a couple trillion in assets with no equity. Reverse split the stock as much as you want, it doesn’t solve the problem with their mortgages. Three years ago, Citi was in much worse shape than BofA. Kind of semantics since both would have, and basically did, fail without government help. Citi’s still messed up, but the forced sale of Countrywide to BofA is killing them. Merrill’s still a good firm, but they overpaid. If/when they have to raise capital, ML is about the only asset they could spin off, but they’re worth about half - maybe less - than what BofA paid for them. BofA CDS spreads are now at the same level they were in March '09. That’s not a good sign.
Anyone else see this story about a BAC foreclosure? http://www.tampabay.com/news/business/realestate/article1186958.ece NEW PORT RICHEY — Seventy-year-old Sharon Bullington may lose her home because she paid her mortgage a week early.
I doubt it will go under…
@Sweep and High, A. Where have you read that BAC has a capitalization problem besides the usual rumor mill stuff on FT? What are the hard numbers on this? When do they report next 10Q? B. BAC is the largest US Bank by deposits and a contributory bank to LIBOR; if the Fed allows BofA to fail; well let’s just say if you think 2008 was bad; you ain’t seen nothing yet. I wouldn’t bet that BAC is going to fail; that’s a losing proposition. They are trying to sell off assets and they have the full backing of the Fed. I wouldn’t bet against the guy with the money machine.
BAC has 1.4 trillion in deposit, every one in two U.S household have an account with them. FDIC just can’t afford to have BOA go bankrupt.
I have had BAC Puts since March which have done really well as you would imagine. I now own calls just in case someone decides to throw them a life raft. I paid very little for the calls but they are down 30 percent since I bought them.
I don’t think they’re going under. No reason to let them fail this go around after bailing them out once (at least) already. But, I do think they’re in dire straights. Their stock was at $4 last time the government stepped in. My over/under is $5 when we start to hear about needing to raise capital. I’m sure Dick Bove will put a stong buy on BAC any moment.
I just bought more call options. I think I read something in the CFA curriculum about not doing this.
Zesty Wrote: ------------------------------------------------------- > @pimpin, If you’re intent on losing money > purchasing BAC; why don’t you just cut out the > middle man and give me a few G’s? > > > @Sweep, How is BAC SOL? What makes you think BAC > wouldn’t just do what Citi did, a reverse stock > split, to maintain price levels? Isn’t your call > of demise severely premature? whats your paypal account?
and ss#?
Zesty Wrote: ------------------------------------------------------- > Oh the Irony!!! > > http://www.wired.com/threatlevel/2010/05/lifelock- > identity-theft/ one of the most barefaced and ingenius frauds prepetuated in modern times…he collected monthly fees to prevent ss theft and fraud while in effect all he did was check to see if it had already occured using publicly available consumer credit reports…he upped the crazy ante by providing his and asking “if my product didnt work could i do this?” and then the icning on the cake turns out he actually stole his dad’s identity to run up 150K in American Express bills…the cojones on this guy- he must walk with a wheelbarrow… http://en.wikipedia.org/wiki/LifeLock
Apparently, it pays to be a crook!
Zesty Wrote: ------------------------------------------------------- > @Sweep and High, > > A. Where have you read that BAC has a > capitalization problem besides the usual rumor > mill stuff on FT? What are the hard numbers on > this? When do they report next 10Q? > > B. BAC is the largest US Bank by deposits and a > contributory bank to LIBOR; if the Fed allows BofA > to fail; well let’s just say if you think 2008 was > bad; you ain’t seen nothing yet. > > I wouldn’t bet that BAC is going to fail; that’s a > losing proposition. They are trying to sell off > assets and they have the full backing of the Fed. > I wouldn’t bet against the guy with the money > machine. I never said I thought the bank was going under. However, there is such a thing as equity becoming worthless whilst the entity survives. See Fannie and Freddie. My point was that their problems are obviosuly much bigger than “price level”.
hmmmm wonder if i can lower my cost, if i buy 100 shares @ 6.00