Skip to comments.Bank of America stock near 2-year low ("hypothetical global market shock.")
Posted on 11/23/2011 9:21:56 AM PST by catnipman
"You can meet capital requirements by either raising capital or shrinking risk weighted assets," said Wiant. "Nobody wants to raise capital at these prices."
That could be especially true now that the Federal Reserve said late Tuesday that BofA, along with five other large U.S. banks, will need to give the Fed loss estimates early next year that accounts for a "hypothetical global market shock."
(Excerpt) Read more at money.cnn.com ...
So, apparently the Fed is pretty darn worried about an incipient "global market shock".
—So, apparently the Fed is pretty darn worried about an incipient “global market shock”.—
Could they mean this: http://www.freerepublic.com/focus/news/2811388/posts?page=14
(Europe Set to Declare Bankruptcy in Early 2012?)
I could care less about these vermin. We’re in the processing of canceling our 25 plus year relationsip with them.
DOW down 200 now..I thinkwe could have a HUGE sell off in the last hour..maybe a total drop of 500 pts....could trigger circuit breakers...lots of people don’t want to be LONG over a long weekend..
I have my house mortgage with them.
LOL. ObamaPimp Buffett bought a ton at $6.30.
This is about GERMANY, not tiny Greece, or pathetic Italy. GERMANY! If this continues, the Dow will be lucky not to fall 1000 pts today and Friday.
The “Smart” money has been leaving Europe and going into US Treasures dues to its safe haven status. In the short term, this is good for us as it allows to us to keep our deficit interest low. In the mid-long term, eventually people will realize we have the same problems as Europe. When that happens, there will be no safe have.
In short, we’re all screwed.
—In short, were all screwed.—
And why I bought a home and small farm in rural Kentucky two weeks before Obama’s election and moved there from my longtime home of Seattle this last summer.
I am wondering if you have an opinion about the FDIC. Do you think it will prove worthless?
We have a lot of CDs at the moment so this concerns me.
Let's suppose the US banks bust and they can no longer redeem your CD’s. The Fed would just print more money to cover the losses. So you'd get your CD money back.
But you might have to wait awhile. FDR declared a “bank holiday” back in 1933. That could well happen again.
And of course you'll be repayed with inflation-devalued currency. But you won't lose your money.
Poor warren buffet, somehow he’ll weasel a profit out of this mess.
2-year low ?
That’s a very generous way of saying...
The market price of it’s shares is down about 90%.
from $54.85 on November 17, 2006.
So if I owned $100 of B of A stock on that date, and it went into bankruptcy now - and the rule of law was upheld and holders of common stock wound up with nothing (disclaimer: don’t count on the rule of law with Obama in office) -
I would only be losing the last $10 of value of my stock after losing $90 already !
Other large banks have also lost almost as much market value.
The market has priced in the fact that it is very questionable if big ol’ banks are solvent.
Since the US can print $$ at will, there is almost no chance it will technically go bankrupt. The more realistic scenario is that it will hyperinflate, making your CD dollars nearly worthless.
Unfortunately, the Global Economy is so distored that I can see a scenario where (bank) interest rates are near zero, but inflation is 20+%.
If the interest on US Treasures ever goes above 5%, then the USG budget becomes unsustainable. That is what is happening in Europe to the PIIGS countries. The Fed’s #1 priority is keeping this from happening. Count on it.
Thanks for your insight. I appreciate it very much.