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BAC Bank of America Corp


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BAC Bank of America Corp

  #1 (permalink)
 
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 Big Mike 
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Recent weeks had made you wonder if BAC would be doomed to fail soon, as their CDS were reaching 2008/2009 levels.

Now today we see that Buffett has invested $5 billion into Bank of America, so he for one thinks they are a stable and sound investment.

Bank of America rallies on Buffett investment - MarketWatch

BAC stock is up 17% on the news.


Quoting 
“Bank of America is a strong, well-led company, and I called [CEO Brian Moynihan] to tell him I wanted to invest in it,” said Buffett, chairman and CEO of Berkshire Hathaway Inc. BRK.A -0.34% BRK.B -0.40% in a statement. “I am impressed with the profit-generating abilities of this franchise, and that they are acting aggressively to put their challenges behind them.

“Bank of America is focused on their customers and on serving them well,” he added. “That’s what customers want, and that’s the company’s strategy.”

Terms call for Bank of America to sell 50,000 shares of cumulative perpetual preferred Stock with a liquidation value of $100,000 a share to Berkshire Hathaway in a private offering.

Mike

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  #3 (permalink)
 
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 worldwary 
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Looks like this got a nice pop but has sold off since the open. Keep an eye on this as this news could turn out to be a game-changer, or not. I would personally stay on the sidelines until there's a break above the highs from earlier today.

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  #4 (permalink)
Retro
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BAC is wildly oversold and so is the rest of the market. BAC will rebound up to 20% in the next several months, before we start dropping again. The macro economics spell doom for the worlds economy but that will take a year to two to unfold, right now we are heading towards a rebound. (Just my 2 cents).

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BAC just made about the dirtiest move it could by putting depositor money as a back stop for some of their (BAC's) worst derivatives. The general idea here is once these derivatives blow up, BAC depositors will be at risk of losing their money which will surely create another TARP-like bailout as BAC has now co-mingled their toxic trash with FDIC insured deposits on the same balance sheet. This is a sure sign that BAC is about to go under and has now made a move of desperation.

Yves Smith has an excellent post on this situation that was first discovered/reported by Bloomberg: Bank of America Deathwatch: Moves Risky Derivatives from Holding Company to Taxpayer-Backstopped Depositors naked capitalism

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Private Banker View Post
BAC just made about the dirtiest move it could by putting depositor money as a back stop for some of their (BAC's) worst derivatives. The general idea here is once these derivatives blow up, BAC depositors will be at risk of losing their money which will surely create another TARP-like bailout as BAC has now co-mingled their toxic trash with FDIC insured deposits on the same balance sheet. This is a sure sign that BAC is about to go under and has now made a move of desperation.

Yves Smith has an excellent post on this situation that was first discovered/reported by Bloomberg: Bank of America Deathwatch: Moves Risky Derivatives from Holding Company to Taxpayer-Backstopped Depositors naked capitalism


I'm so ticked off I can't think straight but I will go postal if these pricks get bailed out again. I don't know how the FDIC works exactly but if the bank fails I would hope the pepole that have accounts just have a check sent straight to them and not go through the bank (in essence refunding/bailing out). That's the way it SHOULD work, the bank fcked up so let them die....give the money directly to the insured depositors and they can try some other bank.

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I'm just wondering how that is even legal...

Mike

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Big Mike View Post
I'm just wondering how that is even legal...

Mike

I was thinking the same thing...

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Big Mike View Post
I'm just wondering how that is even legal...

Mike

Yeah, me too. I just think the TBTF's will do anything they want and apologize later at this point. I'm sure other TBTF's are or will do the same now that BAC has done so. They are essentially using their customers as hostages. This should be an incriminating offense and the top executives should be thrown in jail. The banks were once there to serve their clients/customers and help them for whatever they need. They've now morphed into giant zombies that have one of the most powerful lobbyist groups in the country and feed on their customers while having to take on more and more risk to keep their revenues growing while conducting all sorts of financial/accounting trickery to make it look like they're still in good shape. By reading through the TBTF's recent earnings, it's all too obvious what's taking place.

BofA has been a stagnant company for years. That is one reason why Ken Lewis went on the buying spree in an effort to grow their future revenues. They didn't take into consideration the baggage that came along with these acquired companies. I personally think the company has been abandoned case in point their current CEO. Bryan Moynihan hasn't a clue on how to run a company. He's been Ken Lewis' lap dog for years and years bouncing around to different lines of business within the bank and messing each and every one of them up royally. When I saw that they made him CEO, I knew something was up there.

Any way, it will be interesting to see if this hits the mainstream. This could cause a huge run on the bank IMO...

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I'm trying to understand what this would look like. If the bank continues to lose money on these derivatives, and then we see a collapse of BAC, what are we looking at here? FDIC? But isn't it more complicated, specifically for accounts >250k, because the argument would be the assets were safe up until the moment the bank chose to apply them to derivatives...

Still trying to understand the implications.

Mike

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