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And Bank of America is supposed to be the most "stable" of the megabanks?

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marmar Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-15-08 07:42 PM
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And Bank of America is supposed to be the most "stable" of the megabanks?
Bank of America Needs Capital, Stock May Sink 36% to $9, FBR's Miller Says (Update1)
By David Mildenberg

Dec. 15 (Bloomberg) -- Bank of America Corp. will need to raise more capital to offset rising loan losses, and the stock may sink to $9, according to Friedman, Billings, Ramsey Group Inc. analyst Paul Miller.

The bank should cut its quarterly dividend to a penny from 32 cents and conserve as much capital as possible, Miller wrote in a report issued today as the stock closed at $14.11. He rated shares of Charlotte, North Carolina-based Bank of America underperform. Miller finished first among bearish analysts in a June ranking of the worlds best stock pickers compiled by Bloomberg.

While Bank of Americas capital will be rebuilt over time, we expect that it will have to raise a substantial amount of new common capital to jump-start the process, which will dilute existing shareholders, Miller wrote.

Bank of America Chief Executive Officer Kenneth Lewis is buying Merrill Lynch & Co., the worlds largest securities firm, after the July purchase of Countrywide Financial Corp. The bank said last week it plans to cut as many as 35,000 jobs over three years as it seeks annual after-tax savings of $4.5 billion from the Merrill transaction, now valued at $18.6 billion.

Bank of America doesnt comment on analyst reports, spokesman Scott Silvestri said.

The combined Countrywide, Merrill Lynch and Bank of America have $83 billion of tangible common equity supporting $2.6 trillion of tangible assets, a 3.2 percent cushion that Miller calls too small. .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=axV...




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Double T Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-15-08 07:47 PM
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1. 'TOO BIG TO FAIL', so lets make it BIGGER!
Who are the total and complete idiots making these decisions? The job losses are staggering.
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Peace Patriot Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Dec-16-08 02:24 AM
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2. 35,000 more jobs bit the dust, eh? Who do these corpo/fascists think is going to
create their wealth (and their looting opportunities) in the future? Job cutting in this current financial context--the Financial 9/11 that the Bushwhacks just pulled off--is a downward path. Those 35,000 people pay mortgages and buy cars and clothes and food and computers. They invest. They help support others--children, elderly parents. They go out to dinner at restaurants and go to movies and concerts. They travel. They give to charities. And many of them serve customers in BofA banks, as tellers and loan officers. They and the millions of others who have been laid off are the backbone of the economy. Break that backbone, and you create Great Depression II.

All of these financial sharks seem to be in a conspiracy to do just that--to INDUCE Great Depression II--and I'll be damned if I can figure out what they are thinking, even from their own point of view. Are they stashing their money in offshore accounts and planning to skip out to Tahiti? Do they want to dump another horrendous burden on the Obama administration, so that its hands are tied as to any real reform and it cannot restore good government? WHY do they seem to be ignoring the obvious--that you have to SPEND money to MAKE money? It does not help BoA or the context in they are operating for 30,000 more people to be defaulting on their mortgages and car loans. This narrow thinking, that employed people are somehow the "fat" in a business, that can be cut out with no ill consequence, is beyond me to understand.
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Greyhound Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Dec-16-08 11:58 AM
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3. Great Depression I worked out very well for them, that's why it was created.
B of A is one of the chosen, it will not be allowed to fail. That means they will survive the collapse and will retain the means to buy up the losses for a few percent of the value.

There have been no unforeseen circumstances in this disaster, this is the normal, intended, cycle.


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RB TexLa Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Dec-16-08 12:10 PM
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4. Who said they were the most stable? I sure wouldn't pay them for anymore advice
Really who said that, because they should have people just laughing in their face if they are stupid enough to venture out in public.
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Cleita Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Dec-16-08 12:10 PM
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5. We need to go back to when banks were chartered by state. Once upon a time, each banking
firm was allowed to operate in one state only. Even back then, when B of A operated only in California, it still was one of the largest banks in the country and the largest in the state, however, nothing like the Godzilla it is today. This made the banks manageable by the states who could keep them honest by sending in state inspectors every two years. Also, Savings and Loans and other types of banking operations had separate and distinct functions from each other by law. By allowing the Savings and Loans to take on banking functions, like offering checking accounts, they started the march toward deregulation and laissez faire competitiveness that you see failing before our very eyes today. If I had been a member of Congress I would have tied strings to the bail outs, insisting that we go back to the tighter regulations of the sixties.
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