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]
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.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.
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
10 comments:
That was an excellent call on BAC back in November - after taking on the garbage from CFC and MER, it was hard to see how their balance sheet could be much better than Citi's. Now they are getting the same treatment.
Funny that after the deal between the Brazilian banks Itau and Unibanco closes the market cap of the combined entity likely will be bigger than BAC's. Amazing.
WHat do you make of the fact that Goldman and Morgan are doing so much better recently than the banks?
it now looks like BAC is no longer behind citi, but has overtaken citi now. Citi is holding, but BAC is hitting new lows everyday. It looks like it will fall before Citi does.
Buy a spellchecker.
NW
rumor is they will keep supporting C but maybe not as much BAC? Who knows
This is a market of speculating what a higher power will do...
nam,
Whatever the higher powers are doing will benefit GS and MS. Further, who do you think is in there advising the economic team on what is "best for the country"? Not that they'd ever be self serving.
BAC is back up over $5 after hours... Of course...
Anyone catching the amazing drops in WMT and DLTR the last couple of days... Both tumbled on 'good news"? Both are ranked very high, DLTR shows pretty much 5 stars across the board at ProfitCents.com (aside from liquidity).. The only down side I can find on DLTR is that one of the CEOs had an automatic sale of stock and there was an article last week about DLTR not paying a worker's family death benefits. Ugly story, but not related to the store's income.... Go figure.. jegan
I dont know how anyone buys BAC long or short here - its all in the hands of the government. Just pure gambling down here either way.
I have a piece on DLTR tomorrow. Can't find anything other than "hey its the casino". Another general goes down.
WMT is just an amazing situation. If Americans are too poor to shop WMT we are seriously more screwed than even I think.
TM... Just noticed that your new webpage doesn't seem to email newer comments like the old one did. (always like to see other people's takes on stocks or articles that interest me..) I only came back here to note that Costco also was nailed..
Can only guess this is a rotational market.. Sell that which made a profit.... Buy the bottom of the list and wait till it moves back up. Matter of fact, Cramer was rattling on about selling the Educational stocks (APOL, COCO etc..) As **fundamentally** their P/E ratios are now too high...
jegan
Never mind.. Figured it out....Have to click on the 'subscribe by email'.... jegan
"your new webpage doesn't seem to email newer comments like the old one did"
glad you figured it out because I had no idea what you mean. I get everyone's comments sent to me but then I again, I write the damn thing. Membership has its privledges. I wondered how you knew what to respond to so quickly. There is a "recent comments" tab in the right margin but it updates very slowly.
preach it, brother.
good post, and excellent call on BAC.
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