dcollon Posted July 18, 2012 Share Posted July 18, 2012 Race I understand and mgmt said that nothing this quarter was unexpected, but my comment was more about perception. Uccmal, the disclosure was in their slide presentation on page 16. Link to comment Share on other sites More sharing options...
bmichaud Posted July 18, 2012 Share Posted July 18, 2012 What a piece of sh$t f$cking company and most of all stock. It is going to be YEARS before this garbage is cleared up, and now we're going into a debt-induced deflationary period with global austerity being implemented....it will be years before this trades at a premium to any book value measure. Sorry, had to let off a little steam after the libor announcement and yet again more selling...I get that value investors should appreciate low prices for accumulation purposes, but once a position is established....can't imagine how others who have held for years feel. Unbelievable. Link to comment Share on other sites More sharing options...
hardincap Posted July 18, 2012 Share Posted July 18, 2012 What a piece of sh$t f$cking company and most of all stock. It is going to be YEARS before this garbage is cleared up, and now we're going into a debt-induced deflationary period with global austerity being implemented....it will be years before this trades at a premium to any book value measure. Sorry, had to let off a little steam after the libor announcement and yet again more selling...I get that value investors should appreciate low prices for accumulation purposes, but once a position is established....can't imagine how others who have held for years feel. Unbelievable. did you really think 5-8 years of accumulated crappy loans from countrywide would be resolved quickly? Link to comment Share on other sites More sharing options...
hardincap Posted July 18, 2012 Share Posted July 18, 2012 i think people like berkowitz made a big mistake building full positions at 1x+ tbv, but for us we get to buy it at .6x tbv, 8.1 b3 capital ratio & growing earnings. Link to comment Share on other sites More sharing options...
berkshiremystery Posted July 18, 2012 Share Posted July 18, 2012 What a piece of sh$t f$cking company and most of all stock. It is going to be YEARS before this garbage is cleared up, and now we're going into a debt-induced deflationary period with global austerity being implemented....it will be years before this trades at a premium to any book value measure. Sorry, had to let off a little steam after the libor announcement and yet again more selling...I get that value investors should appreciate low prices for accumulation purposes, but once a position is established....can't imagine how others who have held for years feel. Unbelievable. Sure,... it will take some years before everything is cleared up, but therefore I bought it in the first place...LOL. The current sluggish share valuation is comparable with Fairfax in the last decade. It took some years,...at least 5, until it has risen to a good valuation. Here you can see BofA's valuation in relation to its earnings in the last 25 years. This are the SRC Charts used by Peter Lynch & Soros.... Enjoy! ...go to page 7 of the PDF file to see BofA http://www.srcstockcharts.com/wp-content/uploads/digital-prods/Dow30-25YearCharts.pdf Link to comment Share on other sites More sharing options...
Kraven Posted July 18, 2012 Share Posted July 18, 2012 Gotta love the reaction to continuing "bad" news. It would be like the person who gets the opportunity to buy a home on a street with million dollar homes for $300k. The reason it's so cheap is because it sits on a toxic waste site, but it's in the process of being cleaned up and it's fully expected that it will be cleaned. They move in and say "goddamn it, if only this house didn't have the toxic waste it would be perfect!" Link to comment Share on other sites More sharing options...
Uccmal Posted July 18, 2012 Share Posted July 18, 2012 Race I understand and mgmt said that nothing this quarter was unexpected, but my comment was more about perception. Uccmal, the disclosure was in their slide presentation on page 16. Thankyou. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted July 18, 2012 Share Posted July 18, 2012 They moved the delivery timeline of the $5b in "new bac" phase 1 cost cuts out by a year. Now expected by end of 2014 (not end of 2013). Link to comment Share on other sites More sharing options...
bmichaud Posted July 18, 2012 Share Posted July 18, 2012 What a piece of sh$t f$cking company and most of all stock. It is going to be YEARS before this garbage is cleared up, and now we're going into a debt-induced deflationary period with global austerity being implemented....it will be years before this trades at a premium to any book value measure. Sorry, had to let off a little steam after the libor announcement and yet again more selling...I get that value investors should appreciate low prices for accumulation purposes, but once a position is established....can't imagine how others who have held for years feel. Unbelievable. did you really think 5-8 years of accumulated crappy loans from countrywide would be resolved quickly? No I didn't - just thought the market would reward the Company for moving in the right direction capital-, expense reduction- and credibility-wise sooner than it has....was not at all expecting a reversion to actual book value any time soon, but was hoping for it to move closer to TBV sooner rather than later. Banks are just now cleaning up their books from the previous credit cycle and we're just now about to enter another dip in the credit cycle - I personally don't think the underlying business and the stock price is going to perform well in the "down" part of the credit cycle....I'm worried to say the least - perhaps that's a sign I should be doubling down.... Link to comment Share on other sites More sharing options...
wescobrk Posted July 18, 2012 Share Posted July 18, 2012 Hi Sanjeev, Do you still think it'll trade at tangible book by Christmas? Thanks Link to comment Share on other sites More sharing options...
moore_capital54 Posted July 18, 2012 Share Posted July 18, 2012 What a piece of sh$t f$cking company and most of all stock. It is going to be YEARS before this garbage is cleared up, and now we're going into a debt-induced deflationary period with global austerity being implemented....it will be years before this trades at a premium to any book value measure. Sorry, had to let off a little steam after the libor announcement and yet again more selling...I get that value investors should appreciate low prices for accumulation purposes, but once a position is established....can't imagine how others who have held for years feel. Unbelievable. did you really think 5-8 years of accumulated crappy loans from countrywide would be resolved quickly? No I didn't - just thought the market would reward the Company for moving in the right direction capital-, expense reduction- and credibility-wise sooner than it has....was not at all expecting a reversion to actual book value any time soon, but was hoping for it to move closer to TBV sooner rather than later. Banks are just now cleaning up their books from the previous credit cycle and we're just now about to enter another dip in the credit cycle - I personally don't think the underlying business and the stock price is going to perform well in the "down" part of the credit cycle....I'm worried to say the least - perhaps that's a sign I should be doubling down.... Not sure I follow your logic. You are disappointed with the share price performance today.. With the exception of the $22b in R&W I am very satisfied with the results of BAC today, I'll remind the board the JPM reported a 5-7B loss over the same period. BAC continues to deliver. No doubt the gap will disappear between TB and market price. With regards to price action on the shares, any rally in equity markets will see BAC run into optimism as well. Too much pessimism out there... Link to comment Share on other sites More sharing options...
racemize Posted July 18, 2012 Share Posted July 18, 2012 Not sure I follow your logic. You are disappointed with the share price performance today.. With the exception of the $22b in R&W I am very satisfied with the results of BAC today, I'll remind the board the JPM reported a 5-7B loss over the same period. BAC continues to deliver. No doubt the gap will disappear between TB and market price. With regards to price action on the shares, any rally in equity markets will see BAC run into optimism as well. Too much pessimism out there... +1 Link to comment Share on other sites More sharing options...
bmichaud Posted July 18, 2012 Share Posted July 18, 2012 What a piece of sh$t f$cking company and most of all stock. It is going to be YEARS before this garbage is cleared up, and now we're going into a debt-induced deflationary period with global austerity being implemented....it will be years before this trades at a premium to any book value measure. Sorry, had to let off a little steam after the libor announcement and yet again more selling...I get that value investors should appreciate low prices for accumulation purposes, but once a position is established....can't imagine how others who have held for years feel. Unbelievable. did you really think 5-8 years of accumulated crappy loans from countrywide would be resolved quickly? No I didn't - just thought the market would reward the Company for moving in the right direction capital-, expense reduction- and credibility-wise sooner than it has....was not at all expecting a reversion to actual book value any time soon, but was hoping for it to move closer to TBV sooner rather than later. Banks are just now cleaning up their books from the previous credit cycle and we're just now about to enter another dip in the credit cycle - I personally don't think the underlying business and the stock price is going to perform well in the "down" part of the credit cycle....I'm worried to say the least - perhaps that's a sign I should be doubling down.... Not sure I follow your logic. You are disappointed with the share price performance today.. With the exception of the $22b in R&W I am very satisfied with the results of BAC today, I'll remind the board the JPM reported a 5-7B loss over the same period. BAC continues to deliver. No doubt the gap will disappear between TB and market price. With regards to price action on the shares, any rally in equity markets will see BAC run into optimism as well. Too much pessimism out there... I'm disappointed that the stock is not performing better in response to improving (perceived at least from public financials) fundamentals and the supposed risk-on environment coming back into play....plus the never-ending lawsuits and outrageous behavior that goes on behind the scenes (what the eff else is going on in addition to the LIBOR crap??).... What is the market telling us by perpetually hammering the stock? What are we missing? Fundamentals have vastly improved over the past year, yet the stock is down 20% YOY and is currently selling for less than 60% of TBV. Is Twcfa's (easiest way to remember his username - I apologize for the lack of precision) relatively dire outlook for liabilities hanging over US banks going to come to fruition and that is what is overhanging the stock? Markets are remarkably efficient, as evidenced by the stock price performance in "deep value" names recently in the headlines - SHLD, SVU, RIMM, OSTK - I just wonder what I'm missing with BAC, that's all. Just frustrating to watch. Link to comment Share on other sites More sharing options...
hardincap Posted July 18, 2012 Share Posted July 18, 2012 What a piece of sh$t f$cking company and most of all stock. It is going to be YEARS before this garbage is cleared up, and now we're going into a debt-induced deflationary period with global austerity being implemented....it will be years before this trades at a premium to any book value measure. Sorry, had to let off a little steam after the libor announcement and yet again more selling...I get that value investors should appreciate low prices for accumulation purposes, but once a position is established....can't imagine how others who have held for years feel. Unbelievable. did you really think 5-8 years of accumulated crappy loans from countrywide would be resolved quickly? No I didn't - just thought the market would reward the Company for moving in the right direction capital-, expense reduction- and credibility-wise sooner than it has....was not at all expecting a reversion to actual book value any time soon, but was hoping for it to move closer to TBV sooner rather than later. Banks are just now cleaning up their books from the previous credit cycle and we're just now about to enter another dip in the credit cycle - I personally don't think the underlying business and the stock price is going to perform well in the "down" part of the credit cycle....I'm worried to say the least - perhaps that's a sign I should be doubling down.... Not sure I follow your logic. You are disappointed with the share price performance today.. With the exception of the $22b in R&W I am very satisfied with the results of BAC today, I'll remind the board the JPM reported a 5-7B loss over the same period. BAC continues to deliver. No doubt the gap will disappear between TB and market price. With regards to price action on the shares, any rally in equity markets will see BAC run into optimism as well. Too much pessimism out there... I'm disappointed that the stock is not performing better in response to improving (perceived at least from public financials) fundamentals and the supposed risk-on environment coming back into play....plus the never-ending lawsuits and outrageous behavior that goes on behind the scenes (what the eff else is going on in addition to the LIBOR crap??).... What is the market telling us by perpetually hammering the stock? What are we missing? Fundamentals have vastly improved over the past year, yet the stock is down 20% YOY and is currently selling for less than 60% of TBV. Is Twcfa's (easiest way to remember his username - I apologize for the lack of precision) relatively dire outlook for liabilities hanging over US banks going to come to fruition and that is what is overhanging the stock? Markets are remarkably efficient, as evidenced by the stock price performance in "deep value" names recently in the headlines - SHLD, SVU, RIMM, OSTK - I just wonder what I'm missing with BAC, that's all. Just frustrating to watch. all you needed to say was teh last line. if you believe the markets are remarkably efficient you probably should be investing. i think its the opposite - markets are remarkably inefficient. Link to comment Share on other sites More sharing options...
writser Posted July 18, 2012 Share Posted July 18, 2012 WEB's reasoning about IBM: he was hoping the share price stays as low as possible the coming decade because 1) he doesn't care about the price, only about the underlying business, 2) he can buy more and 3) in particular, a sensible IBM share buyback strategy would be more effective. Can anybody explain to me why this reasoning would not hold for BAC? Link to comment Share on other sites More sharing options...
racemize Posted July 18, 2012 Share Posted July 18, 2012 WEB's reasoning about IBM: he was hoping the share price stays as low as possible the coming decade because 1) he doesn't care about the price, only about the underlying business, 2) he can buy more and 3) in particular, a sensible IBM share buyback strategy would be more effective. Can anybody explain to me why this reasoning would not hold for BAC? this is my strategy, as I'd like to get my position a bit higher still. Link to comment Share on other sites More sharing options...
bmichaud Posted July 18, 2012 Share Posted July 18, 2012 What a piece of sh$t f$cking company and most of all stock. It is going to be YEARS before this garbage is cleared up, and now we're going into a debt-induced deflationary period with global austerity being implemented....it will be years before this trades at a premium to any book value measure. Sorry, had to let off a little steam after the libor announcement and yet again more selling...I get that value investors should appreciate low prices for accumulation purposes, but once a position is established....can't imagine how others who have held for years feel. Unbelievable. did you really think 5-8 years of accumulated crappy loans from countrywide would be resolved quickly? No I didn't - just thought the market would reward the Company for moving in the right direction capital-, expense reduction- and credibility-wise sooner than it has....was not at all expecting a reversion to actual book value any time soon, but was hoping for it to move closer to TBV sooner rather than later. Banks are just now cleaning up their books from the previous credit cycle and we're just now about to enter another dip in the credit cycle - I personally don't think the underlying business and the stock price is going to perform well in the "down" part of the credit cycle....I'm worried to say the least - perhaps that's a sign I should be doubling down.... Not sure I follow your logic. You are disappointed with the share price performance today.. With the exception of the $22b in R&W I am very satisfied with the results of BAC today, I'll remind the board the JPM reported a 5-7B loss over the same period. BAC continues to deliver. No doubt the gap will disappear between TB and market price. With regards to price action on the shares, any rally in equity markets will see BAC run into optimism as well. Too much pessimism out there... I'm disappointed that the stock is not performing better in response to improving (perceived at least from public financials) fundamentals and the supposed risk-on environment coming back into play....plus the never-ending lawsuits and outrageous behavior that goes on behind the scenes (what the eff else is going on in addition to the LIBOR crap??).... What is the market telling us by perpetually hammering the stock? What are we missing? Fundamentals have vastly improved over the past year, yet the stock is down 20% YOY and is currently selling for less than 60% of TBV. Is Twcfa's (easiest way to remember his username - I apologize for the lack of precision) relatively dire outlook for liabilities hanging over US banks going to come to fruition and that is what is overhanging the stock? Markets are remarkably efficient, as evidenced by the stock price performance in "deep value" names recently in the headlines - SHLD, SVU, RIMM, OSTK - I just wonder what I'm missing with BAC, that's all. Just frustrating to watch. all you needed to say was teh last line. if you believe the markets are remarkably efficient you probably should be investing. i think its the opposite - markets are remarkably inefficient. As Klarman says, buying is by definition an arrogant act, as it implies Mr. Market is stupid. Look at the performance of.....SHLD, NTRI, RSH, S, LVLT, CHK, YHOO, SVU.....over the last 10 years. Efficient or is Mr. Market missing something? I hope BAC does not look like one of those over the next 5 years. Link to comment Share on other sites More sharing options...
bmichaud Posted July 18, 2012 Share Posted July 18, 2012 WEB's reasoning about IBM: he was hoping the share price stays as low as possible the coming decade because 1) he doesn't care about the price, only about the underlying business, 2) he can buy more and 3) in particular, a sensible IBM share buyback strategy would be more effective. Can anybody explain to me why this reasoning would not hold for BAC? 1) BAC does not have a buyback program in place and won't for a long time, and 2) if you already own BAC, you want the gap between price and value to close as quickly as possible - to this point I'll reference Klarman again....he likes investing in bankruptcy situations because A) there is a catalyst for the gap to close and B) the time frame is typically relatively short. Buffett is going to buy and NEVER sell IBM, so of course he doesn't care if the stock price flat-lines forever. Link to comment Share on other sites More sharing options...
moore_capital54 Posted July 18, 2012 Share Posted July 18, 2012 What a piece of sh$t f$cking company and most of all stock. It is going to be YEARS before this garbage is cleared up, and now we're going into a debt-induced deflationary period with global austerity being implemented....it will be years before this trades at a premium to any book value measure. Sorry, had to let off a little steam after the libor announcement and yet again more selling...I get that value investors should appreciate low prices for accumulation purposes, but once a position is established....can't imagine how others who have held for years feel. Unbelievable. did you really think 5-8 years of accumulated crappy loans from countrywide would be resolved quickly? No I didn't - just thought the market would reward the Company for moving in the right direction capital-, expense reduction- and credibility-wise sooner than it has....was not at all expecting a reversion to actual book value any time soon, but was hoping for it to move closer to TBV sooner rather than later. Banks are just now cleaning up their books from the previous credit cycle and we're just now about to enter another dip in the credit cycle - I personally don't think the underlying business and the stock price is going to perform well in the "down" part of the credit cycle....I'm worried to say the least - perhaps that's a sign I should be doubling down.... Not sure I follow your logic. You are disappointed with the share price performance today.. With the exception of the $22b in R&W I am very satisfied with the results of BAC today, I'll remind the board the JPM reported a 5-7B loss over the same period. BAC continues to deliver. No doubt the gap will disappear between TB and market price. With regards to price action on the shares, any rally in equity markets will see BAC run into optimism as well. Too much pessimism out there... I'm disappointed that the stock is not performing better in response to improving (perceived at least from public financials) fundamentals and the supposed risk-on environment coming back into play....plus the never-ending lawsuits and outrageous behavior that goes on behind the scenes (what the eff else is going on in addition to the LIBOR crap??).... What is the market telling us by perpetually hammering the stock? What are we missing? Fundamentals have vastly improved over the past year, yet the stock is down 20% YOY and is currently selling for less than 60% of TBV. Is Twcfa's (easiest way to remember his username - I apologize for the lack of precision) relatively dire outlook for liabilities hanging over US banks going to come to fruition and that is what is overhanging the stock? Markets are remarkably efficient, as evidenced by the stock price performance in "deep value" names recently in the headlines - SHLD, SVU, RIMM, OSTK - I just wonder what I'm missing with BAC, that's all. Just frustrating to watch. all you needed to say was teh last line. if you believe the markets are remarkably efficient you probably should be investing. i think its the opposite - markets are remarkably inefficient. As Klarman says, buying is by definition an arrogant act, as it implies Mr. Market is stupid. Look at the performance of.....SHLD, NTRI, RSH, S, LVLT, CHK, YHOO, SVU.....over the last 10 years. Efficient or is Mr. Market missing something? I hope BAC does not look like one of those over the next 5 years. Not one of those stocks looked anything like BAC 10 years ago. They were all trading at huge premiums to tbv and above average PEs. I think you are just frustrated with the timing of this all, but I tend to like when I see intelligent investors capitulating. The first rule of investing for me is to use risk capital, ie capital that you can afford to have permanently deployed. Once you start with that tenet as your foundation its very easy to own something like BAC without worrying about daily fluctuations. Technically the stock still looks very good too. Link to comment Share on other sites More sharing options...
hardincap Posted July 18, 2012 Share Posted July 18, 2012 dono if i agree with 1). 8.1 basel 3 is pretty up there and c & jpm will be ready to start buybacks soon. i do feel your pain. the business has improved and the stock is not reflecting it. klarman said you need conviction, but he also said you need GRIT, because the market will disagree with you much of the time. Link to comment Share on other sites More sharing options...
bmichaud Posted July 18, 2012 Share Posted July 18, 2012 What a piece of sh$t f$cking company and most of all stock. It is going to be YEARS before this garbage is cleared up, and now we're going into a debt-induced deflationary period with global austerity being implemented....it will be years before this trades at a premium to any book value measure. Sorry, had to let off a little steam after the libor announcement and yet again more selling...I get that value investors should appreciate low prices for accumulation purposes, but once a position is established....can't imagine how others who have held for years feel. Unbelievable. did you really think 5-8 years of accumulated crappy loans from countrywide would be resolved quickly? No I didn't - just thought the market would reward the Company for moving in the right direction capital-, expense reduction- and credibility-wise sooner than it has....was not at all expecting a reversion to actual book value any time soon, but was hoping for it to move closer to TBV sooner rather than later. Banks are just now cleaning up their books from the previous credit cycle and we're just now about to enter another dip in the credit cycle - I personally don't think the underlying business and the stock price is going to perform well in the "down" part of the credit cycle....I'm worried to say the least - perhaps that's a sign I should be doubling down.... Not sure I follow your logic. You are disappointed with the share price performance today.. With the exception of the $22b in R&W I am very satisfied with the results of BAC today, I'll remind the board the JPM reported a 5-7B loss over the same period. BAC continues to deliver. No doubt the gap will disappear between TB and market price. With regards to price action on the shares, any rally in equity markets will see BAC run into optimism as well. Too much pessimism out there... I'm disappointed that the stock is not performing better in response to improving (perceived at least from public financials) fundamentals and the supposed risk-on environment coming back into play....plus the never-ending lawsuits and outrageous behavior that goes on behind the scenes (what the eff else is going on in addition to the LIBOR crap??).... What is the market telling us by perpetually hammering the stock? What are we missing? Fundamentals have vastly improved over the past year, yet the stock is down 20% YOY and is currently selling for less than 60% of TBV. Is Twcfa's (easiest way to remember his username - I apologize for the lack of precision) relatively dire outlook for liabilities hanging over US banks going to come to fruition and that is what is overhanging the stock? Markets are remarkably efficient, as evidenced by the stock price performance in "deep value" names recently in the headlines - SHLD, SVU, RIMM, OSTK - I just wonder what I'm missing with BAC, that's all. Just frustrating to watch. all you needed to say was teh last line. if you believe the markets are remarkably efficient you probably should be investing. i think its the opposite - markets are remarkably inefficient. As Klarman says, buying is by definition an arrogant act, as it implies Mr. Market is stupid. Look at the performance of.....SHLD, NTRI, RSH, S, LVLT, CHK, YHOO, SVU.....over the last 10 years. Efficient or is Mr. Market missing something? I hope BAC does not look like one of those over the next 5 years. Not one of those stocks looked anything like BAC 10 years ago. They were all trading at huge premiums to tbv and above average PEs. I think you are just frustrated with the timing of this all, but I tend to like when I see intelligent investors capitulating. The first rule of investing for me is to use risk capital, ie capital that you can afford to have permanently deployed. Once you start with that tenet as your foundation its very easy to own something like BAC without worrying about daily fluctuations. Technically the stock still looks very good too. I fully admit daily observation of the stock price is a large driver of the frustration - but there is no capitulation, just frustration. Speaking of technicals - I was encouraged how oversold it became coming into Q2 earnings thinking that it would be able to beat expectations....that was part of the frustration. Link to comment Share on other sites More sharing options...
LC Posted July 18, 2012 Share Posted July 18, 2012 WEB's reasoning about IBM: he was hoping the share price stays as low as possible the coming decade because 1) he doesn't care about the price, only about the underlying business, 2) he can buy more and 3) in particular, a sensible IBM share buyback strategy would be more effective. Can anybody explain to me why this reasoning would not hold for BAC? How will they return anything to shareholders if their stock price stays depressed and they are unable to raise dividends over $.01 until their warrants expire? Link to comment Share on other sites More sharing options...
jeffmori7 Posted July 18, 2012 Share Posted July 18, 2012 They don'y have to return anything to their shareholders or to think about it right now. They just have to continue doing their job the best they can and the market will recognize it some day. Link to comment Share on other sites More sharing options...
Kiltacular Posted July 18, 2012 Share Posted July 18, 2012 Here's an exchange which addresses the increase in Private Label R&W's. Anyone have additional color on this exchange. You can see on page 16 of the supplemental (as mentioned by dcollon) that R&W's increased from $16.1 to $22.7. Of that $6.6 increase, $3.75 of it was related to Private Label. The Private Label went from $4.855 to $8.6 this quarter. With that in mind, read through this exchange (credit to Seeking Alpha for the transcript): Glenn Schorr – Nomura Securities International Inc. Okay, that’s all we really needed, just to get that range, that’s helpful. And then on the, just curious, I don’t know if I missed it in the prepared remarks, but I think the private label claims spiked by like 77%, I’m not sure if that’s a single private label holder or what’s closed that spike. Bruce R. Thompson Yeah, I think it’s a series of holders. And I think the one thing that I think is important to take a step back and when you think about these private label claims is that when we set up the reserves and entered into the settlement at the end of the second quarter of last year, we obviously established both reserves and range of possible loss with the anticipation that we would see increased claim activity. And I think as you look at these private label claims, I think that it’s important to think of a couple of things. The first is they’re notional amounts. The second thing is if you look at the losses that tend to be associated with those notional amounts, they’re roughly $0.60 on the dollar of what the notional amounts are. So if you take that $8 billion number that’s come in and think about it in the context of $0.60, it gets you down to a number of roughly $5 billion. And then you can take the settlement data that we’ve had out there, if you wanted to look at a Gibbs & Bruns type settlement number off of collateral losses, and if you apply that to that number, you get something that’s well below $1 billion dollars. And obviously as we go through the process and set up both reserves and range of possible loss, we factor in the data that you see there. -END _+_+_+_+_ Is Thompson effectively saying that the $8.6 billion in Private Label R&W claims would likely actually cost BofA only $1 billion?? If so, it's obviously peanuts. Perhaps the selloff was also related to the delay in cost reduction mentioned by Ericopoly but if it is primarily related to the R&W increases, this seems overdone. Also, on another note, for MBIA holders, the exchange regarding the Syncora settlement includes some comments that not all their reserves for monoline claims are included in the line item labelled "Monolines" on page 16. Link to comment Share on other sites More sharing options...
xazp Posted July 18, 2012 Share Posted July 18, 2012 I was really happy with today's earnings results. The key number here is the 8.1% B3 ratio. A year ago, the street said that BAC didn't have enough capital, and their capital levels were the worst of all the big banks. Today, they have gone from last place to first - their capital levels are slightly above all the other big U.S. banks. [C - 7.9%, JPM - 7.9%, WFC - 7.8%]. At this rate, they well might hit their final B3 target of 9% this year. To put that in context, my expectation was they'd take until mid-2013 to hit their current B3 ratio, and mid-2014 to hit their final levels. So relative to my expectations, the wait time until buybacks just got shorter by a year or a year and half... wow. They are currently earning at a pace of about $10Bn/year (today's earnings number was $2.5Bn), which creates about $15Bn/year in capital due to DTAs. According to their investor presentation, they anticipate giving back most of the capital they generate to shareholders. This seems to imply very high levels of shareholder buybacks. To me the very best outcome for a long-term shareholder is low price + large buybacks. I mean, I want them to buy as many shares as they possibly can at current prices. I will happily wait years and years if they can keep buying stock at these prices. Link to comment Share on other sites More sharing options...
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