BOVE: The Losses Bank Of America Is About To Take Are "Historic In Proportion"

TBI ^ | 6-2-2011 | Joe Weisenthal

[blam]

DICK BOVE: The Losses Bank Of America Is About To Take Are "Historic In Proportion"

Joe Weisenthal
Jun. 2, 2011, 9:29 AM

In a comment out today, Dick Bove predicts huge losses ahead for Bank of America:

It is now believed that BAC will lose an additional $32B in the next three years related to the housing crisis. Approximately, $9B of this money will be derived from its reserve. The remaining $23B will be charged to earnings at the rate of $2B per quarter for the next three years. It is likely that the bank will sell additional assets to soften the impact on capital. To determine BAC’s exposure to the housing market five sectors were isolated: the securities portfolio, trusts serviced by the bank, the loan portfolio, reps and warranties, and the bank’s servicing portfolio. The losses were then estimated based on the bank’s recent experience. The biggest risk in the securities portfolio appears to come from the government backed securities.

All that being said, he thinks it's all priced in.

Conclusion: The losses BAC is about to take related to housing are historic in proportion. However, the stock seems to have already discounted this problem in its present price. Bove remains a buyer within the constraint of suggesting that bank portfolios be underweighted at the moment due to the deteriorating economic signals.

[martinidon]

not good since I own a lot of this stock.

[blam]

More Bad News For Financials: Moody's Places 3 Huge Banks Under Review For Possible Downgrade

"As if the financials -- which have been getting killed -- needed more bad news, on top of the Goldman Sachs subpoena, here's more..."

"Moody's says it has placed deposit, senior debt, and senior subordinated debt ratings under review for possible downgrade at Bank of America, Citigroup, and Wells" Fargo.

[brownsfan]

I own just a little, but it’s been bleeding badly. This and Cisco are my bad purchases.

[martinidon]

at least my apple stock offsets some of this loss. I don’t want to sell but I also don’t want to hang on to a dog.

[Republic of Texas]

That’s too bad for a bank that openly courts illegal aliens.

[choctaw man]

“The Losses Bank Of America Is About To Take Are “Historic In Proportion”

Couldn’t happen to a nicer bunch of crooks....recently raised me to 23% on credit cards (...and I have excellent credit)...paid them off and am done with them!!!

[Buckeye McFrog]

yep, they are trying to recover as much of this from their credit card customers as they can. Great time to pay them off if you can.

[pburgh01]

I sued them over a mortgage in 2008 I had a property in Florida. They converted an ARM to a fixed 30 year and refused to fix some clerical errors at the closing. A few thousand out of my pocket in attorney fees and 9 months till they relented and settled. Worst dishonest scumbags to works with. F them, let them go broke and send their thousands or primarlily Obama supporting employees out the door. I take a joy in seeing a comeuppance for this mega multinationals. Next on the plate is the epic fall of China, you hear rumblings already. Dopey smug chimps, I guess the Chinese invented everything else but common sense. They hold so much of our paper and depend on us for exports to keep them afloat and that is faltering. When that thing unravels I think we could have genocide and oppression that would make Stalin and Hitler look like choir boys. Think 9 figures dead.

[snowrip]

Well, it probably doesn’t have anything to do with the fact that they’re the go-to bank for illegal aliens.

When the story broke a few years back that they were marketing themselves this way, with Spanish-only ads, billboards, and processing centers specifically for mortgages for illegals... I canceled my BOA credit cards and refinanced my mortgage with another bank.

BOA can FOAD for extending a hand to those who $hit on America and everything she stands for.

[goodnesswins]

Well, gee...color me NOT SURPRISED.....we HATE B of A.....not necessarily the people. Their practices. Sounds like payback is a b*tch!

[copaliscrossing]

IMNSHO, Wells Fargo is “in the race” for the biggest scumbags on the face of the earth. I know “hate” is a strong word, but I really do hate Wells Fargo Bank for a variety of reasons.

[Texas Songwriter]

They brought it on themselves. They deserve to be criminally prosecuted. They are among the elite who may have brought this republic to an end (it remains to be completely played out), but they were more than happy to steal peoples’ homes, and put the future of the country in jeopardy. The leadership of Bank of America, Citi, Wells Fargo, J.P.Morgan/Chase should all be completely criminally prosecuted and simmmer in prison for the rest of their pathetic, unnatural lives.

[Georgia Girl 2]

All three of these banks have been in near insolvency for at least3 years. It will be a miracle if they all don’t fail. They are going to take hellacious write downs at some point on all the toxic mortgages they are holding.