Guardian UK: Bank of America's share nosedive fuels fears of a second credit crunch

[marmar]

Bank of America's share nosedive fuels fears of a second credit crunch
The rapidly declining housing market is heightening concern that the bank will need to make huge write-offs

Tom Bawden
guardian.co.uk, Tuesday 23 August 2011


Bank of America continued its tailspin on Tuesday as shares in the largest US bank tumbled by another 6.4% to their lowest level since March 2009, fuelling fears of a second banking crisis.

As concerns mounted that BoA will need to take huge additional write-offs on bad mortgages, the cost of insuring the group's debt jumped to record levels and investors became increasingly concerned that the financial system could be facing a fresh credit crunch.

BoA's share-price fall followed a 7.9% drop on Monday, which took the stock to less than half its value at the start of the year – a decline that wiped about $65bn from its market capitalisation.

"It does sap investor confidence to see a bank of this stature struggling so mightily," said David Dietze, chief investment strategist at Point View Financial Services in New Jersey. ............(more)

The complete piece is at: http://www.guardian.co.uk/business/2011/aug/23/bank-of-america-credit-crunch-fears

[Demeter]

1. The bank needs to be put out of our misery

and BoA isn't the only one, either.