Bank of America's Profit Unexpectedly Falls on Bankruptcies

[shugah]

Bank of America's Profit Unexpectedly Falls on Bankruptcies

Jan. 23 (Bloomberg) -- Bank of America Corp., the second- largest U.S. bank, unexpectedly reported its first quarterly profit decline in more than four years as bankruptcies surged and loan profit growth slowed.

~snip~

Bank of America's bad loans jumped after a surge in filings for bankruptcy protection in the weeks leading up to an Oct. 17 change in federal law that made it tougher for Americans to erase debt. Thirteen straight increases in short-term rates by the Federal Reserve drove up the bank's borrowing costs as a decline in long-term rates pinched profit from lending.

``The higher losses from the bankruptcies were to some extent frontloaded from filings that would have taken place in 2006,'' said Joseph Morford, an analyst with RBC Capital Markets in San Francisco. ``But the flattening of the yield curve will be a lingering issue for the bank this year because there's at least one more rate

http://www.bloomberg.com/apps/news?pid=10000087&sid=aLuyyUoYvx9s&refer=top_world_news

[xchrom]

1. wow -- who would've guessed that?

:eyes:

[alcibiades_mystery]

2. Quelle dommage....

My heart bleeds.

[hadrons]

3. "choke" ... "sniff" .... I'm crying my eyes out now .....

[Cessna Invesco Palin]

4. Morons.

What did they expect was going to happen after changing the bankruptcy rules?

[MiniMe]

5. Notice they don't say they had a loss, just that their profits fell. nt

[bread_and_roses]

6. Oh Boo Hoo you profiteering vampires (n/t)

[Uben]

7. Well DUH!

When you give credit to every Creton who can sign their name, what do you expect? And then they pass their losses on to the customers who do pay!

[Media_Lies_Daily]

8. Legalized loan sharks deserve what they get....and more.

[Divernan]

9. But future profits will make up for this quarter's very quickly.

I'm sure the Bank expected this one time only drop because of the flood of bankruptcy filings to beat the new law. But now that the new law is in place, the bank's gullible credit card borrowers cannot declare bankruptcy and will be on the hook for life to repay their credit card balances. So the banks will be giving even larger credit card limits to their customers, and when a payment is missed, demanding immediate payment of the entire balance, and going to court to get judgments to force sale of houses and other assets, attach salaries, etc. If the Republicans stay in power, they'll be passing laws to allow attachments of social security checks to pay off commercial debts.
I think colleges/universities should make a big effort to educate their students to just say no to all the many offers they receive from credit card companies.

[crikkett]

22. Say what..?

Please explain,
"But now that the new law is in place, the bank's gullible credit card borrowers cannot declare bankruptcy and will be on the hook for life to repay their credit card balances."

thanks,
Crikkett

[Divernan]

28. Law was changed on Oct. 17,'05, as per original post.

That's why there was a huge rush to file bankruptcy during the last quarter of '05. This new bankruptcy law was bought and paid for by the banks/credit card lenders, and it means that debtors cannot walk away from debts on credit cards or moneys owed for health care either. So the lenders will be offering even easier credit, knowing that most debtors no longer can file for bankruptcy.

[SoCalDem]

46. In Riverside, EVEN with the stricter rules, bankruptcies are STILL soaring

Apparently, there must be at least a 45 minute counseling session at some point in the filing..Supposedly this is the time where the counselor tells the people about their "repayment plans" and helps them set up their finances to cover these payments.. WELL..most of the people are in such dire straits, that the counselors have nothing to say to them for the last 40 minutes, so they often just "chat", to comply with the new law...

If you are broke, unemployed and have no equity in your house..or you rent..what will the CC companies DO?? Kill you?

All the counseling in the world will not create money, when they have none..

[Autobot77]

41. I think Colleges should stop allowing credit card companies on campus.

Where they give away free T-shirts and crap. When I was in college, I have gotten the most credit card offers than any time in my life.

[no_hypocrisy]

10. And Bank of America has acquired still more debt by its

purchase of MBNA.

[realFedUp]

31. I was thinking the same thing...they just bought MBNA...

[Carla in Ca]

33. And, MBNA helped write the new

bankruptcy laws...go figure!

[Autobot77]

42. Carla, is that beagle your dog?

I have a beagle also, they're the greatest dogs. :)

[Carla in Ca]

44. Yes. Her name is Jean Harlow

From a puppy-mill breeder. On drugs for life but a very happy, and so far, healthy, 5 year old.
She is by far the sweetest of all the rescue dogs we've had. We have saved a few from shelters but she was the first we ever got from a raid. We were in a rescue network, got a call, and off we went. It took us 3 hours to get there and three seconds to grab her. Lucky us.

I'm thinking of writing a story about the adventure, her illness and the two years we spent getting her stabilized. Thanks for asking.

Please, tell me about your Beagle:hi:

[1932]

11. People who work for money (rather than invest capital) are backbone of the

economy, but Bush has been binding such heavy loads on their backs (without the rich lifting a finger) that their backs are going to finally break and the pharisees, I mean the rich Republican-voting, CEOs earning 500 times as much as their load bearers won't have anyone to carry their shit anymore.

[qanda]

12. I guess my fees will increase

Actually, Bank of America (as banks go) is not a terrible bank. I have had accounts at a variety of banks and comparatively they have wonderful customer service and are pretty fair about covering my occasional mistakes.

[Javaman]

13. I just paid off my last credit card. I'm now at zero worth!! Woo hoo!!!

I'm going all cash now. No more cards, no more debt.

[AnneD]

17. I am all cash now and have been for 2 yrs...

I still am working to the Nirvana of debt free. I hope to be down to one debt after summer and totally debt free in '08.
:applause: :woohoo: Good for you Javaman.

[reprobate]

26. Javaman, you're doing the one thing that can hurt the republicans.

This stupid economy is based on consumer spending, and that depends on consumer debt which finances all the banks and financial giants keeping the republicans in power.

If enough Americans would just act as you are we could take over power in a walk, because there would not be enough profits to pay their lackie politicians.

Many years ago my Daddy drilled into me the three laws of financial success:

1. There ain't no free lunch.

2. If it seems to good to be true, it is!

3. Never spend prinsiple.

4. In financial institutions, as in casinos, the house always has the advantage.


OK, the four laws of financial success.

[gratuitous]

14. B of A shrugs

Well, they'll take a little hit on their profits for one quarter, but apres ça, le deluge. Debtors aren't going to be able to wipe their financial slates clean through bankruptcy, and Bank of America will be in the first rank of creditors, snatching the last dollars out of a family's hands as they go under for the third time.

Work farms and debtors' prisons will be growth industries in the next decade. Well, they won't be called that, of course (silly!); but they'll be here just as they were in Victorian England, with all the attendant misery and hopelessness.

[PassingFair]

15. "Unexpectedly" UNEXPECTEDLY? ? ?

Has someone changed the definition of this word?

"in a way that was not expected; "her brother showed up at the wedding out of the blue"

:banghead:

[NYC]

23. That was my reaction.

It's laughable.

[peacetalksforall]

16. Our leaders in Washington who approved the legislaton based on

their stated reason - that some people abused the bankruptcy law - can feel sorry for B of A, even if people here don't feel very sorry for B of A.

Our leaders in Washington, including Democrats, are taking on a very punitively parental and superior attitude to the citizens of this country. They are prime ministers to the king. And we are the serfs.

[savemefromdumbya]

18. thought this might happen!

[CountAllVotes]

19. teehee!

I love it! And now they are partners with MBNA, the other * shills. I hope they both go BROKE as they both make me sick! :puke:

:kick:

[Democrats_win]

20. Hey BOA, Foreclose you! Still no schysters jumping off GG bridge. :(

[JNelson6563]

21. Big steaming plate of irony for them

Ok, so let me get this straight: The Marketeers who faithfully keep DU's Stock Watch Thread saw this coming ages ago (like before the legislation was passed) and these "experts", who fleece us consumers for a living, didn't have a clue this would happen? Ugh.

The only question this leaves me with is how did these guys get to be "titans" on the field? Short-sighted, clueless, greedy bastards.....

Julie

[Lindacooks]

24. HA ha!!

assholes.

[wicket]

25. BWAHAHAHAHAHAHA!!!!

:rofl: :rofl: :rofl:

I have no pity for these fucks.

[warrens]

27. Oh, the humanity

I don't know how I'm going to get through the day after this tragic news.

[babylonsister]

29. Cry me a river! nt

[AntiFascist]

30. Where would we be now if not for B of A?

http://www.geocities.com/saudhouse_p/theodd.htm

<snip>

More critical, the Bank of America had gotten a closer look at BCCI's financial tangle than any regulators, yet the California bankers did not blow the whistle.

<snip>

had the Bank of America raised an official alarm, authorities in Britain and elsewhere might have been prompted to demand their own examination back in 1978.

But, of course, blowing the whistle could have dropped BCCI's value like a stone just when Bank of America was unloading its shares at a hefty profit. The two institutions were to remain friendly for years to come, with the Bank of America providing a range of correspondent services for BCCI.

From BCCI's standpoint, the Bank of America had served its purpose, midwifing the infant bank into the world. BCCI was now up to operating independently.

[bush_is_wacko]

32. Just wait and see how many of us file for bankruptcy that are still

in the income level not effected by the bankruptcy law after a winter of rising heating costs, groceries, gas,credit card minimum payments, etc., etc.

I was told that a whole lot of people that filed for bankruptcy would have been unaffected by the law change anyway, but I'm sure there are many more of us out there that are sitting on the wall like humpty dumpty right now, not knowing how much longer they are going to be able to hold on.

[kineneb]

34. sent papers off to attorney Friday

We are amongst those who were not affected by the new law. We looked at our situation and decided to go ahead. We are low income; Hubby is disabled and on dialysis. It would be a little hard for them to get blood from this turnip.

[bush_is_wacko]

35. Sorry to hear that you felt you had to do that...

Unfortunately, I know where you are coming from. I have been off work since July due to a complete medical meltdown that has yet to be diagnosed. Since there is no diagnosis and I could conceivably get better we don't yet qualify for any disability. WE are teetering pretty close to the edge. I guess pride is keeping us from doing what we are surely bound to have to do sooner or later. Stupid. Why I have an ounce of pride left is really beyond me at this point but ...

[kineneb]

37. I got over the pride bit

after I thought about Bernie Ebbers and WorldCom. You see, Hubby was a WC employee and was part of the mass layoff on May 1, 2002. He was unable to find any work after that, due to age and poor health (sure, someone will hire an over-50 diabetic with approaching renal failure).

There is no way we will ever be able to pay back anything on Hubby's disability income, and I am now his transportation and official "health care specialist." Plus, the system penalizes him if I were to earn enough to cause him to lose Medicaid. I can't work enough hours to make it worth my time, and of course, because it would have to be part time, there would be no medical benefits. So it is better financially for me to stay home, teach piano lessons "under the table" and make handcrafted stuff (woodturning, jewelery) for sale.

Bankruptcy was necessary to get rid of the evil credit card debt. At one point we had almost caught up and could have been able to pay them off, but then Hubby lost his job, we had to sell our house and move, we lost medical insurance, etc. Stuff just snowballed.

[freethought]

36. HA HA HA HA! Be Careful what you whish for!!

You just may get it!! T.S. for Bank America!!!

[lonestarnot]

38. wah wah wah with a short a pronunciation!

[eppur_se_muova]

39. Falling profits? HA-ha ! nt

[DenaliDemocrat]

40. DUH........................

How could this be "unexpected"? Don't these assholes realize that not everyone can take a hit with higher gas prices, food prices, medical care, and utility bills and still make it? People have been living in credit for two years now. Just wait until interest rates hit 7.5% and all of those silly "interest-only" loans and other such nonsense come to fruition. The Right Wing, Bush, and their Oligarchy have sowed these seeds, now they shall reap the harvest.

[leesa]

43. Good, ya greedy fuckers.

[fishwax]

45. aw, that's too bad

:rofl:

fuck you, boa ...