Thursday, February 5, 2009

Bank of America (BAC) Below $4

Mark wondered two months ago in [Nov 26: After Citigroup is Bank of America Next?] Magic 8 Ball says Yes!

We posed the exact same theory after the Citigroup (C) bailout was announced. Good to see realism and cynicism reach into our news agencies ;) That Countrywide Financial exposure cannot be a good thing. I am also wondering if the Merrill Lynch (MER) deal is still going to go through - certainly the terms are prone to change.

A few days later [Dec 1: Hello, I need your Tax Dollars]

Full disclosure - I'd be short Bank of America (BAC) here, with stop loss over that 20 day moving average (aka north of $16.50s or so) - I'd use a 4% stake or so.

I'd be short until the US government uses my own money
Nov 24: Details on Citigroup Bailout] to blast myself out of my position, using my own taxes to cause egregious losses to myself when they bailout BAC. That's how socialism works. (Or, I'd stick around with a target of $7-$10 if that comes before the government uses my own money against me.)

Hi, my name is Bank of America - aka Citigroup 2.0 [
Nov 26: After Citigroup is Bank of America Next?] Now who wants some of these yummy Countrywide loans? Anyone? Will someone else other than Uncle Hank raise their hand? Please... anyone but Hank... please.

Looks like my target of $7 to $10 was more than surpassed... can't claim I'm a bear! A bear would of said $1.

Well that leaves Wells Fargo (WFC) and JPMorgan (JPM) in our path to effective nationalization. [Jan 15: And Then There Was One]

Again, just nationalize the system... we're already there - we're just playing a charade of "free markets" right now. Thank you Phil Gramm.

  • A person with knowledge of the discussions said Thursday the new aid package (for BAC) could be modeled along the lines of the financial lifeline that was thrown to Citigroup Inc. in November. (well that worked out well for Citigroup, so why not?)

If JPMorgan is attacked later in 2009 it truly will be end of days.

Again - why we are doing this charade going is beyond me - this is nationalization. Take them over - kill equity and bondholders and let's get it over with.

I ask you dear shareholder of Fannie, Freddie, Federal Reserve balance sheet - can you imagine what is going on in those dark crevices where your eyes are not allowed to see? What is happening to that Countrywide Financial (which accounted for >20% of all US mortgages at one point) on Bank of America's balance sheet?

The good news is in the future you won't see the losses these financials are taking each and every day which are now so public in BAC and C. They will quietly suffered - just imagine the carnage going on at Fannie and Freddie.

Lenovo (Chinese computer firm) took first loss in 3 years - CEO resigns. In America the CEO would ask for retention bonus to stay on and "guide the company through this troubling time". Because only a select few are so talented .... It is amazing to see the cultural differences and complete lack of shame. Not one legislative action towards clawbacks in 1.5 years of capital destruction to the buddies who brought down the entire US financial system. In fact I read our friend who once headed Merrill Lynch, Stanley O'Neil (and got $160M as golden parachute to "leave") [You're Fired! Now Here is $160M to Help Ease the Pain] has now found new employment. As thousands upon thousands of his former employees lose their jobs. Lovely. He must have some level of acumen beyond imagination to already be back to another multi million position.

If anyone saw highlights of the Harry Markopolos hearing yesterday laying out the case he PRESENTED (as a gift) to the SEC in the Madoff case, and the abject lack of oversight in the system - you'd simply be disgusted. I need to find a nice summary of the topic to post here in the future - if they were so negligent on something so huge I can only imagine all the medium sized malfeasance they are missing. As always there is not only 1 cockroach - this is just an obvious one.

What a system. If only the American sheeple paid attention - they'd be enraged. Thankfully for those in charge - they are suitably distracted....with belly button lint.

No position

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