Posted on 09/09/2011 7:51:01 AM PDT by SeekAndFind
Under what authority does this guy think the government should do this? I’ve read the US Constitution and I never saw anything that said some companies are too big to fail and therefore the government can take them over at any time and run them.
And let us NOT forget that the 2012 Dem convention is being held...where you ask?..why, in North Carolina....BoA’s home state...yup Gov Perdue should have lots of fun next year..
If the existing operations are fine, then it is in the interest of the creditors to keep it running and generating income so they can be paid off. Everyone wants them to muddle through.
Not sure how warren (pay more taxes)buffett will profit from this,but rest assured he will.
I know what you are saying but Chris Whalen is probably the best analyst on the banking system I have ever read. This article by Blodgett probably is based on Chris’s analysis from a few months ago. I read it and decided to reduce our client’s exposure to BAC bonds based on it.
Whalen’s business is:
http://www.institutionalriskanalytics.com/team.html
I think his BAC report is still on the site. Its an amazing read. Don’t look at this as a political issue but as a consumer one. Chris is basically writing that the financial and economic crisis is not going to be solved until the large bank balance sheets are cleaned out of the bad mortgages still on the books. If we had utilized an RTC-like approach three years ago we would have been a lot better off now.
Every negative story like this will cause the underlying stock to go up. Happens every time.
In accounting, we refer to those billions of dollars as a "sunk cost".
Dodd-Frank.
Big is not better. I always felt they kept acquiring banks to obfuscate the fact that they were not making money.
What I still find laughable is that when you go into a branch, they have to ask you what state you opened your account. Amazing.
Hey, BoA - How’d that Bank of Amigo strategy work out for ya?
Dodd-Frank is part of the US Constitution?
Companies that continually make bad business decisions need to die, and not keep being bailed out by the taxpayers.
Let it go.
Banks operate under a federal charter. That is why deposits can and are insured by the Government at no risk to the depositor. In exchange, they are heavily regulated. If they are too weak to continue, the feds can take them over. It happens all the time. The BoA situation is only notable because of the size of the bank.
If Obama can do this, what is to stop him from Seizing Microsoft and "restructuring" them to free up some of the revenue needed at BofA, FannieMae, or Kenya. You know, it's all in the interest of spreading the wealth, fairness, social justice, and all that.
Rather interesting business model,
Buy up and merge with nearly every bank under the sun, then shut nearly all of them down thus eliminating the competition.
In the old west they just shot the competition.
No, but Dodd-Frank is the controlling legislation that gives the Federal Reserve and the FDIC (as well as other controlling regulatory agencies) the power to take over a bank into receivership and resolve the debts and liabilities of same.
Here’s a quick overview:
http://www.clevelandfed.org/research/commentary/2011/2011-01.cfm
Exactly so.
Banks that want the protection of the FDIC deposit insurance, or the Fed’s discount window have to deal with the regulations that stem from taking the first bite of the poison fruit.
The decision to buy Countrywide Financial (the source of all these toxic mortgages that BofA is holding) was NOT made by the current CEO, Brian Moynihan but by the previous CEO, Ken Lewis.
Moynihan stepped into a hole dug for him by his predecessor.
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