BAC dividend increase

[Kiltacular]

The big banks and their shareholders will soon realize that it is not a good idea to be in a position where the government gets to tell them what to do. The reality of Dodd Frank will continue to get worse as the regulations are written. Congress always wants more power and they will use that power to turn the banks into utilities which buy government debt.

 

I think the reality will continue to get better and better.  Once the election is over (no matter who wins), the trend will continue.  The politicians don't care about fixing this stuff (for the most part) -- it is just popular with the electorate (both the left and the tea party folk).  The banks have been the scapegoat for the meltdown (whether fully deserved or not). 

 

After this election cycle, I believe that we'll see the trend reverse.  It is one reason that a lot of the regulations stipulated by Dodd-Frank have not been fully decided on -- they're all waiting until after November, when this won't cost them votes.

 

Even so, there's already lots of pushback on the regulations.  As an example:

 

http://www.bloomberg.com/news/2012-03-22/volcker-rule-deadline-may-shift-as-momentum-for-revision-builds.html

 

[biaggio]

Sheila Blair commented this week that she wouldn't have approved JPM's capital plans because it leaves them with a 4% leverage ratio at the end of 2013 under the stressed scenario.

 

I also recently read an article about how analyst applied the recent US stress to European banks and European banks passed as well.  So I am always take stress test results with a grain of salt.

 

I am starting to think the same.

 

In retrospect I am thinking that this is at least done to improve the confidence in the system. Get people feeling that things are improving, start buying, borrowing, making deals, etc

 

One of the main thoughts I have on investing in BAC is the government's need + motivation to have BAC survive. BAC is the financial sysem with 1 out of 2 households doing business with BAC-if BAC does not thrive then the whole system is in trouble. US gov t whatever it has to do to make sure that big banks do well in future i.e tbtf