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Goldman On Total BofA Putback Losses: $25 Billion (Which Apparently Is A Good Thing)
Goldman's Richard Ramsden looks at Bank of America and concludes that it is a buy based on his total expectation for put back losses ($25 billion), how much is provisioned ($7 billion), and tax netting ($6 billion). The total after tax-losses of $12 billion presumably compare favorably compared to the $17 billion in market cap lost prior to earnings. And presto: you must now buy. Stunningly there is no such highly technical tea leaf reading-cum-analysis as to just what the FRBNY is now involved. Oh well - when needed, the Goldman report will merely be updated, and a non-decimal zero inserted here or there as appropriate.
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I am the only one who thinks a billion dollars is still a lot of money? Therefore 25 Billion is a whole lot of money? Goldman and these banks act a few billion here and there in losses is no big deal - like me losing $20.
It's rediculous and a terrible waste and we all know who pays the bill in the long run - not the banks but us citizens of america. I say we let all the banks go bankrupt.
In the grand scheme of things, $25 Billion is chump change.
However, this "report" is more important for the psyops is represents than what it actually contains. They are beginning to manage the public meme regarding this problem. This is a controlled "official" leak that is attempting to measure response and to gain feedback.
See, up to now the "rumor" has been that this could explode into many Trillion$. So when a well respected house says "only" $25 Billion, now we can begin to talk seriously. This is all about perception management. I start at $4 Trillion. Goldman says $25 Billion. Let's meet at $100 or $150 Billion of "I'm sorry" money and then Congress can quickly pass the political solution...... after the Mid-Terms of course.
Hang on to your pants boys because Goldman is whispering into your ear while undoing your belt. All that's left is for you and I to bend over.
+1
Chump change, not even a weeks worth of POMO. Toss it on the compost pile at the FED.
What has market cap got to do with it? What percentage of companies make their market cap as a profit?
I clearly didn't realise that when a company makes a loss, the shares should drop by the value of that loss.
Agreed. One of the dumbest things I have ever read published by a bank.
There is a different moron for every day of the year.
REIT price action is a matter of national security.
I acknowledge too that the years 2000s have killed the meaning of money. A billion dollars used to be a pharaonic amount. Now it is pocket money.
I still wonder how people lose fait in paper money in a hyperinflation situation...
Hundreds of billions are being printed on a weekly basis and still people are happy when they get a few thousand a month.
Here in Europe its just mindblowing. Today, I've seen on the front page of the newspaper that the crisis has costed us 17.000 euro for each citizen.
And with a national debt that is at 57.000 euro for each citizen, you can start to wonder how much longuer this can go on.
It can keep going until the TVs stop broadcasting or the handouts cease to exist for the poor. When that time comes it will be world-wide chaos, and the greatest war of all time will be upon us. Global feudalism or freedom, which will mankind choose?
Hump Day playlist, enjoy the music!
http://www.youtube.com/view_play_list?p=D78860E6821CDD13
LOL! Ben's book was not as horrible as anticipated. You can see the quants looking around and passing the hot bank potato already.
Same people that think it's a good thing for them to steal your money.
Lol ... why is the FRBNY involved? To cut the deal and approve all information released to the public of course. The FRBNY speaks for the banking empire and makes sure that none of the bankers in the club are harmed in any way.
.... and the sheet goes on .... and the sheet goes on ... drums keep pounding rhythm to my brain ...
The report says losses will be spread out over several years? This shows the farce of it all. When they have to buy back the mortgages, they must pay par, are they saying they are going to put all mortgages back on bs at par and only recognize the loss upon final resolution of the REO sale?
Also, to assume the putback rate on private label is the same as GSE seems a bit rich, as they were the jumbo and subprime.
One last thing, the report ONLY USES LOANS PAST 90 days and assumes a proportion of these will be put back. What should happen is all non-conforming loans should be put back.
Seems like a farce to me...
Well, since it is on their books as the overinflated price so they didn't have to take a loss, then looks like they have to buy it back for the same inflated price.
I'm sure then at that point the Fed will step in and buy them all. What a freaking joke.
Is there any "Truth, Justice and the American Way" anymore?
I can't wait to see the news headline that Wells Fargo has been hit with a massive putback lawsuit. Their brethren all have trouble with robo-signers, but they're squeaky clean? I was born at night, but it wasn't LAST NIGHT!
So in otherwords Goldman is trying to dump any shares they have now before price reflects reality.
And it's working, just look at the options of BAC. They went green while BAC was still down 2%.
My only fear is tomorrow when options expire and that could cause a selloff on Friday.
And I understand the two aren't exactly related, but they are as cocky as GS and JPM ever hope to be.
Listening to GS on this deal is like taking a serial killer's word that he is innocent. GS is so fucking deep in the shit, they have to go this direction or they admit their complicity. Read 'The Big Short'...in a nutshell you will understand how depraved those psycho controlling assholes at GS are...karma is coming with a big fucking hammer and payback is gonna be a bitch for those bastards.
Constant "sell messages" surging through the book today. And yet...price movement minimum. Umm...under different circumstances we would be in danger of flash crashing.
Sweet...and now allegations against judges fixing cases in favor of the CFTC. Where does it all end?
PERP WALKS! I want my PERP WALKS! LINE 'EM UP!
Hmmm...
How is that meant exactly?
Is that like when someone Jacks-off and then analyses the result?
Actually, I just met with a bunch of friends, all with BoA mortgages, and we have all decided to strategically default.
So, there you go Goldman.
Anyone who "invests" based on this stupid report has to be barely sentient. The true depths of the fraud have barely been plumbed and these charlatans perform a few quick calculations and pronounce all well and good!? Is there no end to the supply of greater fools? These jackanapes seem to think so.
Thanks for taking the time to discuss this, I feel strongly about it and love learning more on this topic.
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