Yeah, that didn’t work out so well. There’s so much bullshiat with BAC it’s just laughable. Two days ago they say they don’t need to raise capital. I knew they did, I just didn’t figure they’d get Buffet on board so easily. I should have paid more attention to Dealbreaker: http://dealbreaker.com/2011/08/who-wants-to-put-their-guarantee-on-bank-of-americas-box/
Sweep the Leg Wrote: ------------------------------------------------------- > Yeah, that didn’t work out so well. There’s so > much bullshiat with BAC it’s just laughable. Two > days ago they say they don’t need to raise > capital. I knew they did, I just didn’t figure > they’d get Buffet on board so easily. I should > have paid more attention to Dealbreaker: > > http://dealbreaker.com/2011/08/who-wants-to-put-th > eir-guarantee-on-bank-of-americas-box/ Yeah the presser is just great though same as the GS. Berkshire called senior management, we definitely didn’t need capital but are happy to take it. Don’t read anything more into the fact we sold capital at a high cost that we didn’t need. Having said all that maybe they didn’t need capital, the WB endorsement is worth as much as the actual $5B in capital to a lot of investors.
I fully agree. I don’t think they needed the $5B…yet anyway. They needed the endorsement immediately though. Oh well, $5B still isn’t going to help them with $200B in mortgage writedowns/settlements remaining. We’ll just kick the can down the road a while.
Didn’t want to be the one that said, “told you so” but you guys got this call pretty wrong.
Zesty Wrote: ------------------------------------------------------- > Didn’t want to be the one that said, “told you so” > but you guys got this call pretty wrong. A bit early to be boasting, dont you think? Its not really a win if Uncle Warren came and bailed you out. And I stayed away.
@Zesty - Sure, I got my options call wrong. But, considering three days ago you were highly skeptical of BAC’s capitalization problems and today they have to get a handout from WB, I’d say HighYielder and I nailed this pretty well. Still money to be made betting against BAC, but I’ll have to rethink my strategy.
Sweep the Leg Wrote: ------------------------------------------------------- > @Zesty - Sure, I got my options call wrong. But, > considering three days ago you were highly > skeptical of BAC’s capitalization problems and > today they have to get a handout from WB, I’d say > HighYielder and I nailed this pretty well. > > Still money to be made betting against BAC, but > I’ll have to rethink my strategy. Betting against BAC at this point seems dangerous because even if the fundamentals are in your favour, you will be betting against policy makers who will do everything they can to prevent a crisis emerging.
Or if they put in a short selling ban on bac.
exit point around @ ~ 9 or so
Palantir Wrote: ------------------------------------------------------- > Or if they put in a short selling ban on bac. That doesn’t help. At this point most would realize short selling bans cause even more panic and get rid of the bottom fishing allowance that sellers have to buy back.
Carson Wrote: ------------------------------------------------------- > Betting against BAC at this point seems dangerous > because even if the fundamentals are in your > favour, you will be betting against policy makers > who will do everything they can to prevent a > crisis emerging. True, that’s why I’m not going to rush into another trade. Ultimately I may do nothing but watch. The more I think about my current puts, I think there’s a small chance I can still make some money. Buffet’s position is horrible news for BAC shareholders. As usual, Buffet’s terms are amazingly unfavorable for the bank (and its shareholders), and just his involvement is very bad news. http://www.zerohedge.com/news/bank-america-back-under-8-and-why-bac-shareholders-should-be-selling-strength
yeah, everyone forgets that he did that deal with Goldman back in 2008 when the stock was like $120ish and it went sub-$50 a few months later.
@Sweep, Bofa had over $13 billion in losses attributed to mortgage write-downs/losses last quarter alone! So $5 billion is in no way a recapitalization of BAC. So you’re wrong on that front. WB’s $5 Billion is a vote of confidence because WB knows, like I had been saying all along that there is no conceivable way it is going to be allowed to fail and Bofa is in better shape than Citi.
@High, GS is at $110 now, so what’s your point? Also, if you think WB is buying common shares than you’re sorely mistaken. From what I’ve read WB usually guys preferred, warrants, etc in these kind of deals
Your loss is my gain, keep the short ship moving boys!
Zesty Wrote: ------------------------------------------------------- > @Sweep, Bofa had over $13 billion in losses > attributed to mortgage write-downs/losses last > quarter alone! So $5 billion is in no way a > recapitalization of BAC. So you’re wrong on that > front. WB’s $5 Billion is a vote of confidence > because WB knows, like I had been saying all along > that there is no conceivable way it is going to be > allowed to fail and Bofa is in better shape than > Citi. WTF would BoA give WB a handout if they were in such good shape? You are starting to make yourself sound like a rookie. My point was that the GS deal that everyone fawned over and said EXACTLY what you just did about it in 2008 was a precursor to a 50% drop in the stock price. Is you Dad the CEO or something? It seems weird to want to defend a TBTF bank.
And its not a “vote of confidence”, its a “I can put $5 Billion in here and book an almost automatic 35% profit”. A vote of confidence would be him hitting the open market and buying the common. Pull your head out.
@lowyielder; Rookie? Who is the one defending is obviously wrong call here? Bofa is not giving WB a hand out, now you sound like the rookie. Bofa welcomed the much needed vote of confidence for WB. This is more of an issue of shoring up confidence in Bofa. Let me know if you need more lessons; class is in session.
Zesty Wrote: ------------------------------------------------------- > @Sweep, Bofa had over $13 billion in losses > attributed to mortgage write-downs/losses last > quarter alone! So $5 billion is in no way a > recapitalization of BAC. So you’re wrong on that > front. WB’s $5 Billion is a vote of confidence > because WB knows, like I had been saying all along > that there is no conceivable way it is going to be > allowed to fail and Bofa is in better shape than > Citi. Read my post, the third one from the top. I already said $5B is like pissing into the wind with BAC. For whatever reason, you seem completely unwilling to recognize BAC is in serious trouble. It’s not normal for the biggest bank in the country to lose 40% of their market cap in a month, personally attack a financial blogger that dares to assert they’re in trouble, say their completely okay, then need a $5B vote of confidence from WB. You can’t honestly believe those are signs of a healthy company.
@LowYielder, “The move may help boost confidence in the Bank of America – the nation’s largest bank…” http://latimesblogs.latimes.com/money_co/2011/08/buffett-invests-5-billioin-in-bank-of-america.html Look newbie, apparently I’m not the only one making this assertion!