obtuse_investor Posted October 15, 2014 Share Posted October 15, 2014 ... It was a fine quarter for BAC. It was a fine quarter for the govt. Where is your patriotism!? j/k It is an extortion racket and nothing more. We can either complain about it or learn to live with it. Link to comment Share on other sites More sharing options...
rkbabang Posted October 15, 2014 Share Posted October 15, 2014 ... It was a fine quarter for BAC. It was a fine quarter for the govt. Where is your patriotism!? j/k It is an extortion racket and nothing more. We can either complain about it or learn to live with it. Or both. Link to comment Share on other sites More sharing options...
CorpRaider Posted October 15, 2014 Share Posted October 15, 2014 Anytime a man with that much spray tanner tries to sell you something, you should run. Link to comment Share on other sites More sharing options...
oddballstocks Posted October 15, 2014 Share Posted October 15, 2014 Underlying earnings look good but with the US government taking all they can of them, investors have lost faith in their predictability. I mean, it's not as if the govt. lost money on the financial crisis. This starts to look like expropriation of a questionable nature. Regulators are not 'fair' across the board when it comes to banks. I believe regulators are 'making them pay' for the crisis and will for many years. This is not something you'll see someone say on the record, but conversations and experience seem to bear this out. Spoke to a bank exec who said a banker across town was very vocal about gov intrusion/regulation/right wing issues, suddenly their bank was subject to a very intense review that poked each nook and cranny of the bank, was time consuming and expensive. This exec said they have kept their mouth shut and regulators have been easy and nice on them. The crisis with TBTF made regulators look foolish, they're getting their pound of flesh right now. I don't know how long it'll take until this heals, but I would say expect too much regulation, unfair disadvantages to the bigger banks from the crisis such as BAC and C. Note that C failed their stress test that they had hundreds of employees working on. I think they could have had 1,000 people working on it and they still would fail, failure isn't a function of the quality of the report or the actual situation, but rather the regulator mood. Link to comment Share on other sites More sharing options...
rkbabang Posted October 15, 2014 Share Posted October 15, 2014 Spoke to a bank exec who said a banker across town was very vocal about gov intrusion/regulation/right wing issues, suddenly their bank was subject to a very intense review that poked each nook and cranny of the bank, was time consuming and expensive. This exec said they have kept their mouth shut and regulators have been easy and nice on them. Just keep your mouth shut (and bend over), Big Brother is watching. There is no need to use the cattle prods when the livestock just keep their heads down and go where they are pointed. Link to comment Share on other sites More sharing options...
Kraven Posted October 15, 2014 Share Posted October 15, 2014 Underlying earnings look good but with the US government taking all they can of them, investors have lost faith in their predictability. I mean, it's not as if the govt. lost money on the financial crisis. This starts to look like expropriation of a questionable nature. Regulators are not 'fair' across the board when it comes to banks. I believe regulators are 'making them pay' for the crisis and will for many years. This is not something you'll see someone say on the record, but conversations and experience seem to bear this out. Spoke to a bank exec who said a banker across town was very vocal about gov intrusion/regulation/right wing issues, suddenly their bank was subject to a very intense review that poked each nook and cranny of the bank, was time consuming and expensive. This exec said they have kept their mouth shut and regulators have been easy and nice on them. The crisis with TBTF made regulators look foolish, they're getting their pound of flesh right now. I don't know how long it'll take until this heals, but I would say expect too much regulation, unfair disadvantages to the bigger banks from the crisis such as BAC and C. Note that C failed their stress test that they had hundreds of employees working on. I think they could have had 1,000 people working on it and they still would fail, failure isn't a function of the quality of the report or the actual situation, but rather the regulator mood. All good points. I have never understood why people on the board continue to find this to be a mystery. I posted a number of times how this will continue until it can't. That is, the banks (in particular BAC) will be bled until there is no blood left or the environment changes. What would be a change in environment? Could be a Republican administration, if that's even possible anymore. Otherwise, there has to be a general change in public sentiment. Something will have to essentially replace the hatred for banks. Could be something new to hate (there's always something) or something so positive it subsumes macro negativity. Just as an example, the internet explosion in the mid 90's lifted people out of the doldrums of the early 90's and replaced all of the negativity about Iraq, recession, Milken, S&L's, etc. Real estate did it after 9/11. "Morning in America" did it after the 1970's. Link to comment Share on other sites More sharing options...
mike_3772 Posted October 15, 2014 Share Posted October 15, 2014 From an Opinion piece in the WSJ by Geoffrey Manne: Google made headlines this month when the tech giant agreed to pay $19 million to settle Federal Trade Commission charges that the company had made it too easy for children to make unauthorized purchases in the Android app store. That wasn't all: The FTC effectively gave itself the right to oversee Google's app-store design decisions for the next two decades. This is the latest in a series of legal settlements that threaten to hobble innovation in the fast-paced technology industry. Link to comment Share on other sites More sharing options...
txlaw Posted October 15, 2014 Share Posted October 15, 2014 Underlying earnings look good but with the US government taking all they can of them, investors have lost faith in their predictability. I mean, it's not as if the govt. lost money on the financial crisis. This starts to look like expropriation of a questionable nature. Regulators are not 'fair' across the board when it comes to banks. I believe regulators are 'making them pay' for the crisis and will for many years. This is not something you'll see someone say on the record, but conversations and experience seem to bear this out. Spoke to a bank exec who said a banker across town was very vocal about gov intrusion/regulation/right wing issues, suddenly their bank was subject to a very intense review that poked each nook and cranny of the bank, was time consuming and expensive. This exec said they have kept their mouth shut and regulators have been easy and nice on them. The crisis with TBTF made regulators look foolish, they're getting their pound of flesh right now. I don't know how long it'll take until this heals, but I would say expect too much regulation, unfair disadvantages to the bigger banks from the crisis such as BAC and C. Note that C failed their stress test that they had hundreds of employees working on. I think they could have had 1,000 people working on it and they still would fail, failure isn't a function of the quality of the report or the actual situation, but rather the regulator mood. When we're talking about regulation or civil suits across an entire sector, one cannot expect it to be "fair" ever. There are only so many resources to go around, and being able to prove up malfeasance will vary based on the circumstances. It's much more feasible to actually find and be able to prove illegitimate activity when it's a large organization one is looking into. So, yeah, big banks get more scrutiny. Of course, on the flip side, small fries will complain when a broad rule is put into place that affects them in a worse way than the big guys (think FDIC fee raises). Regulators will always get whining from the industry. I also don't think you can simply blame it on "pound of flesh" mentality. Part of it is also the "pendulum swinging" phenomenon. Regulators were very cautious during the crisis because of the counter-cyclical stance that had to be taken to keep the economy from going down the abyss. Now, they can afford to actually go after organizations for their malfeasance. I don't think it's revenge, per se. And I would also be very wary about extrapolating what some bank exec who has right wing leanings says about being persecuted to what's actually going on. People have a tendency to exaggerate these sorts of things. Link to comment Share on other sites More sharing options...
Uccmal Posted October 15, 2014 Share Posted October 15, 2014 Underlying earnings look good but with the US government taking all they can of them, investors have lost faith in their predictability. I mean, it's not as if the govt. lost money on the financial crisis. This starts to look like expropriation of a questionable nature. I don't think we can ascribe any view on BAC to investors based on today's sell off. BAC's coffers got hit by the government -- and rightfully so, since the disgorgement was related to ill-gotten gains. Underlying earnings are starting to shine through though, even in this environment where NIMs are compressed and global growth is slowing. It was a fine quarter for BAC. It was a fine quarter for the govt. Take a look at your paystub or tax returns. It is always a fine quarter for the government. Who said crime doesn't pay? "Well, it pays a little." - Johnny Dangerously You guys gave me a good laugh. FWIW, People are panicking all over the place today. While they are dojng that BAC has earned 810 million in Cash in the last two weeks - since Q end. I bought a slug of 2017s - $15.00 today and dumped all my BAC puts. I must be a masochist - I am losing money hand over fist and having fun. Link to comment Share on other sites More sharing options...
KCLarkin Posted October 15, 2014 Share Posted October 15, 2014 Regulators are not 'fair' across the board when it comes to banks. I believe regulators are 'making them pay' for the crisis and will for many years. This is not something you'll see someone say on the record, but conversations and experience seem to bear this out. This is fair and totally reasonable. Unfortunately, the people who are paying (current shareholders and executives) aren't the ones who created the mess. Until we find a way to hold individuals accountable, we are never going to fix TBTF or moral hazard. Link to comment Share on other sites More sharing options...
fareastwarriors Posted October 15, 2014 Share Posted October 15, 2014 Who's adding here? Link to comment Share on other sites More sharing options...
DCG Posted October 15, 2014 Share Posted October 15, 2014 I added this morning. Link to comment Share on other sites More sharing options...
KCLarkin Posted October 15, 2014 Share Posted October 15, 2014 I will probably buy some 2017 LEAPS today but running low on dry powder. Too much excitement today. Link to comment Share on other sites More sharing options...
Liberty Posted October 15, 2014 Share Posted October 15, 2014 Good thing BAC has a huge buyback authorization... Oh wait. :'( Link to comment Share on other sites More sharing options...
fareastwarriors Posted October 15, 2014 Share Posted October 15, 2014 Bank of America Caught in Rates Tide Doubts About Path of Interest Rates Will Likely Keep Its Shares in Check http://online.wsj.com/articles/bank-of-america-caught-in-rates-tide-heard-on-the-street-1413401004 Link to comment Share on other sites More sharing options...
ni-co Posted October 15, 2014 Share Posted October 15, 2014 Bank of America Caught in Rates Tide Doubts About Path of Interest Rates Will Likely Keep Its Shares in Check http://online.wsj.com/articles/bank-of-america-caught-in-rates-tide-heard-on-the-street-1413401004 Just assume for a second that the share price had gone 20% up on the news, would this article have been published? It's always amazing to me how articles follow stock price movements when it should be the other way around. Link to comment Share on other sites More sharing options...
KCLarkin Posted October 16, 2014 Share Posted October 16, 2014 Just assume for a second that the share price had gone 20% up on the news, would this article have been published? It's always amazing to me how articles follow stock price movements when it should be the other way around. To be fair, many people thought interest rates would be over 3% at the end of the year. Sub 2% rates for a prolonged period would have a major impact on bank earnings. In this case, the cause in the stock price drop is obvious and warranted. The fact that BAC reported today is just a coincidence. Link to comment Share on other sites More sharing options...
Uccmal Posted October 16, 2014 Share Posted October 16, 2014 Betty G. asked a question about what happens if rates stay really low such as they were today. Bruce T. suggested the risk was maybe $100 m. Later on he is asked something similar. He said something to the effect that cash builds up on the balance sheet which they are not reinvesting at these low rates. http://seekingalpha.com/article/2564725-bank-of-americas-bac-ceo-brian-moynihan-on-q3-2014-results-earnings-call-transcript?page=7&p=qanda&l=last BAc, and none of these banks are going to lend money to anyone with less than stellar credit if they are going to be sued every time the shit hits the fan. Either the interest rates rise, or the government will take on some of the burden via a GSE to fuel lending. Right now the pendulum is at the far end of the credit cycle. In the mean time BAC appears to be capable of earning $2.00 per share EPS and more than that in cash flow. The money is just going to pile on the balance sheet until it can be given back to shareholders one way or other. Link to comment Share on other sites More sharing options...
ni-co Posted October 16, 2014 Share Posted October 16, 2014 Just assume for a second that the share price had gone 20% up on the news, would this article have been published? It's always amazing to me how articles follow stock price movements when it should be the other way around. To be fair, many people thought interest rates would be over 3% at the end of the year. Sub 2% rates for a prolonged period would have a major impact on bank earnings. In this case, the cause in the stock price drop is obvious and warranted. The fact that BAC reported today is just a coincidence. From the article: Granted, the absence of huge litigation charges should improve the bottom line going forward; BofA finally looks to have put most of its legal woes behind it. But current valuations almost certainly reflect that prospect. Come on. "Current valuations reflect that prospect?" This is just plainly nuts. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted October 17, 2014 Share Posted October 17, 2014 I have a new favorite commentator: http://finance.yahoo.com/video/banks-big-hit-203800586.html Link to comment Share on other sites More sharing options...
Andy Dufresne Posted October 17, 2014 Share Posted October 17, 2014 I have a new favorite commentator: http://finance.yahoo.com/video/banks-big-hit-203800586.html The rich borrowing whilst the "middle-class" is tightening the belt? Normally I'd say this is the rich borrowing while rates are low, but this does not bode well for economic expansion -> no inflationary pressures -> no rate hikes -> banks' earnings not increasing ... Oh, and yes, Eric, I understand why she's your new favorite commentator, though I do hope she lasts longer than Henry VIII's average marriage ;) Link to comment Share on other sites More sharing options...
beerbaron Posted October 18, 2014 Share Posted October 18, 2014 I have a new favorite commentator: http://finance.yahoo.com/video/banks-big-hit-203800586.html The rich borrowing whilst the "middle-class" is tightening the belt? Normally I'd say this is the rich borrowing while rates are low, but this does not bode well for economic expansion -> no inflationary pressures -> no rate hikes -> banks' earnings not increasing ... Oh, and yes, Eric, I understand why she's your new favorite commentator, though I do hope she lasts longer than Henry VIII's average marriage ;) I wonder why women are less then 1% of the work force in the asset management business but represents 50% of the financial TV business.... Humm it has nothing to do with their looks. BeerBaron Link to comment Share on other sites More sharing options...
Andy Dufresne Posted October 18, 2014 Share Posted October 18, 2014 I have a new favorite commentator: http://finance.yahoo.com/video/banks-big-hit-203800586.html The rich borrowing whilst the "middle-class" is tightening the belt? Normally I'd say this is the rich borrowing while rates are low, but this does not bode well for economic expansion -> no inflationary pressures -> no rate hikes -> banks' earnings not increasing ... Oh, and yes, Eric, I understand why she's your new favorite commentator, though I do hope she lasts longer than Henry VIII's average marriage ;) I wonder why women are less then 1% of the work force in the asset management business but represents 50% of the financial TV business.... Humm it has nothing to do with their looks. BeerBaron Probably TV networks take equal opportunity more seriously than AM firms?!? ;) Link to comment Share on other sites More sharing options...
jouni1 Posted October 18, 2014 Share Posted October 18, 2014 I have a new favorite commentator: http://finance.yahoo.com/video/banks-big-hit-203800586.html The rich borrowing whilst the "middle-class" is tightening the belt? Normally I'd say this is the rich borrowing while rates are low, but this does not bode well for economic expansion -> no inflationary pressures -> no rate hikes -> banks' earnings not increasing ... Oh, and yes, Eric, I understand why she's your new favorite commentator, though I do hope she lasts longer than Henry VIII's average marriage ;) I wonder why women are less then 1% of the work force in the asset management business but represents 50% of the financial TV business.... Humm it has nothing to do with their looks. BeerBaron usually men like looking at women. Link to comment Share on other sites More sharing options...
fareastwarriors Posted October 27, 2014 Share Posted October 27, 2014 BofA Mortgage Settlement Stalls Over SEC Political Fight http://www.bloomberg.com/news/2014-10-27/bofa-mortgage-settlement-stalls-over-sec-political-fight.html Link to comment Share on other sites More sharing options...
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