Tuesday, May 05, 2009
Bank of America Needs $33.9 Billion...
Want to buy a bridge?
via NYT
The government has told Bank of America it will need to raise $33.9 billion in capital to withstand any worsening of the economic downturn, according to an executive at the bank.
Executives sparred with the government over the amount, which is higher than executives believed the bank needed. But J. Steele Alphin, the bank’s chief administrative officer, said Bank of America would have plenty of options to raise the capital on its own before it would have to convert any of taxpayer money into common stock, a move that would effectively increase the government’s holdings in the troubled bank.
“We’re not happy about it because it’s still a big number,” Mr. Alphin said. “We think it should be a bit less at the end of the day.”
Financial markets in Asia dropped initially on the news as investors questioned whether the results of the government’s stress tests of the nation’s 19 largest banks, whose assets represent about two-thirds of the nation’s financial system, would show more weakness in the financial system than hoped.
The Treasury Department declined to comment on Tuesday evening.
More at the link.
Ummm. if the news was really as simple as $34Billion, Timmeh Geithner would be crowing about it, not keeping mum. This won't end well with Geithner, Summers and Bernanke at the helm. Where are the Inspectors General? Flag down on the play.
If you're of the betting sort, I'd go short of Bank Of America. That second, bigger wave of foreclosures is coming, and it is just beginning right about now. Those are the Prime Option ARMs, and the Commercial Real Estate Markets. Subprime was broad, but peanuts in comparative values.
A bigger number, in this case, would have actually given a whiff of credibility.
The "Stress Tests" are a debacle before they even finish. **heavy fucking sigh**
"FDIC" their asses, or let them fail on their own, already.
Feeding the Black Hole simply will not work any longer.
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Labels: Banksters, Ben Bernanke, Stress Tests, Tim Fucking Geithner, Wall Street Swindle
