It’s getting impossible to figure what will happen next in this world. But to even think that there is a “0” chance of another TBTF failing is just cheerleading.
There are at least a dozen EU banks who have had their stocks collapse. Their market cap value is less than 1% of assets. The “Short Ban” in Europe is forcing global investors to take defensive positions in bank stocks where trading is not restricted. This is just adding to the selling in the US financial names.
Lehman went bust in a matter of days. The end came after the stock broke $5. When a stock breaks $5 there is a pretty decent chance it is headed to zero. Institutional holders (there are a ton who own this dog) HAVE to off load stocks when the $5 level is breached.
I think that BAC should not trade under $5 based on their book. But that makes no difference at all. “Book” and “logic” have little to do with what is going on today. The problem is that everyone understands the market dynamics. In the present climate the market players will push BAC, knowing that long-term holders will be forced to sell if the “players” prevail.
There is no TARP option this time around. The TBTF argument has been decided. Failure will be permitted this time around. Should things role in this direction the Fed could stand up and purchase a big chunk of BAC assets. But that would be the last decision that Bernanke will make. There is absolutely no stomach left in America for another big bank bailout. There is no “Bernanke Put” in BAC stock.
Cramer is dead wrong. Another Lehman type event is staring us in the face. It will probably come first in Europe, but it will boomerang around and hit BAC hard.
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6.0088. I wondered why the Bloomberg iPhone app broke out two extra decimal places earlier today...
Edit: 30 secs later and they're gone again! 6.01 does look a lot more healthy, I suppose...
Did someone say buy?
Better take their Bongs away.
Bruce someone big is unloading
I'm not Cramer fan (or hater), but in the morning, he actually sounded quite concerned/scared...he almost sounded as emotionally fragile as the time he said "they're nut! they're nuts! they know nothing!" I know 'reading' people is subjective, but just wanted to throw it out there.
What I find surprising about Twister, is that it had to be clear to Bernanke that this would kill NIM and hurt some big banks cash flow. Hell, they've been lying about asset values for years, and only real, honest, cash flow keeps them kickin. Bruce is right, Bernanke is planning on allowing some TBTFs to fail. KABOOM.
Citigroup hit a low of 24.11 but that's actually 2.41 before the 10:1 reverse split was done. BAC can do the same thing as these banks are WTBTF (way too big to fail) and the Fed has access to unlimited funds and accounting chicanery. Of course if it does happen, I will throw a block party serving 12 yr old Macallan.
Funny enough, they didn't do the reverse split until this year. Maybe when their stock couldn't ever break through $5 barrier (not in either 2009 or 2010 rallies, or the one that lasted until early 2011), they figured this must've been the reason.
bruce, what's with the graffiti?
first, you vandalize bank stocks by painting a stark picture.
then, you vandalize the buildings of our fine city by painting them with graffiti.
why do you hate our freedom so much?
Bruce, why did you close your hedge fund "Falconer Limited"?
Does _anyone_ actually know what BAC's book _really_ is?
If it was marked to market today, I'm pretty sure it'd be negative if only for all the worthless seconds..
Is Warner Buffert sh*tting in his bath water because his diaper does not help him? I hope he is coughing up his own feces just before he takes his well deserved dirt nap.
WORTHLESS PAPER HOLDERS GETTING CRUNCHED. BTFD>>PHYSICAL GOLD SILVER
Went to the Federal Reserve, looked at the distribution of the manufacture of money.
Of all the notes they printed since 1996, most have doubled. The number of $100.00 bills, though, has gone up around 6x. (They do not talk about coins even though the page says "and coins"). So our survivalist friends will have to wait another day for their nickels story).
http://www.federalreserve.gov/paymentsystems/files/coin_0797-2nd.pdf
However, reading the above referenced document (mis-named "coin_0797" - it's all about the Benjamin), tells an interesting story of how and why the $100's were printed. It basically assumes a print & replace strategy for $100 bill, not a print & print & print and then later replace strategy. However, it does seem to lay out principles that discuss options for the recall of US currency. It also states that while all US currency is still basically spendable, it does suggest at some time that like England's Fifty Pound note, a small window may be created for the recall of currency.
That means that all those banks and folk who hold the US currency may be given small window to reshuffle their holding of their $100's, and it may be risky and costly to do so.
Is Danny back in the pool?
In response to Bid the Soldier - In 1984 workers sit at a desk repeating, "Yes, sir, it wasn't me."
You "gold bugs" are getting destroyed. FUNNY!
IF YOU DONT HOLD IF YOU DONT OWN IT. PAPER HOLDERS GETTING CRUSHED..!
Yeah, there are a ton of dipshits like yourself on margin that have to sell.
Everyone is getting destroyed today, but gold is still up for the year. The real slaughter is in silver!
Who knew Gold was an asset and not a commodity.. LOLz!!!
Gold will recover. Stocks won't.
One might argue that BAC book is LESS THAN ZERO
The real problem is that nobody believes BAC's "book". If they did, you could buy up the entire company for a huge discount.
that means that credit agricole goes forst its 4 euros
Another excellent post. Where there is no tarp however - there is the Fed. When they say they're willing to get into MBS purchases again - it happens so soon. I don't think they will allow the BAC collapse we should have. It is TBTF and I believe the voting members would agree on it. They will Hoover-up more of the unmarketable securities at 98c on the dollar.
Really, my sons are not slaves to these cretins, I wish they would knock it off.
If you or your sons watch TV or give hollywood your money - you are a slave. Keep watching TV cause it enpowers your overlords.
first of all it doesn't matter if BAC trades below $5, the rule on that is flexible. If it remains below $5 then they might have to do something like CITI, which is a reverse split. The same people who kicked around Ken Lewis and BAC the first time are still running the show, the real issue is how much love do they give BAC this time? If BAC does go under that makes CITI looks a lot better. We still need retail banks.
Cramer is a one dimensional TV adman. When you mention his name you bring your writing down a notch automatically.
the real issue is how much US taxpayer money has Bernanke put into the ECB? this worries me. when do the perma-globalist bankers running the Fed decide to firewall off their constituents, in this case their depositors? Interesting one would imagine that Obama would bring Bernanke down, but it could be the other way around. Clearly the last 500 or so DOW points are a vote of no confidence on Operation Twist, (Obamas Jobs program isn't too well off either)
WELL SAID ON CRAMER. Bruce you are the man. Cramer doesn't deserve mention any longer, unless you are posting for new folks as you should every so often to warn them like you warn kids about Crystal Meth.
There were 400k viewers at the time. It pissed me off that he was spouting BS.
You're right, he's irrelevant.
Cramer is worse than irrelevant. He is evil. TV controls the sheep who watch TV.
Right on about "you know who". Ever notice how short he is - a classic Napoleon Complex
BAC is not located in Manhattan and does not have the political connections like C.
@ Sun Tzu - BAC has a much bigger political connection.. They hold the voters money in an election year ... The politicians cannot afford BAC folding up.. thats not to say BAC wont become a govt's ward like AIG. just my 2 cents...
Poor Ricky Pendajo Perry, now will he get his grease...
http://www.zerohedge.com/news/bank-americas-dead-drop-rick-perry-we-will...
U.S. Govt needs to announce a plan called 'The Big Fix' where they put millions back to work fixing, improving, rebuilding the nations bridges, roads, dams, electrical grid, etc.
At least the money would go to the good of everyone!
Name the bridges and dams that need to be rebuilt. Most of the highways in my area are already under construction and it's mostly being done by people who can't speak English. I believe Obama's stimulus was $800 billion just 2 years ago. We are already running a $1.5 trillion annual deficit. Should we push it to $2 or $3 trillion?
What other Soviet-style make-work programs can you think of? How about hiring millions of people to sweep the streets?
Ten to twenty-six % of US bridges are in need of repair or structurally obsolete depending who you ask. Estimated cost $140 billion. Less than is wasted in a busy month in Iraq/Afghan or on buying worthless mortgages from banks.
What does everybody do for a living in '1984?'
There are 3 career paths.
1) Military (direct war-machine participation)
2) Industry (goods/services required by said war-machine)
3) Politics (domestic psy-ops necessary to protect operation of said war-machine)
Cool. I've got a lot of food service experience. Bus boy, dishwashing and fast food counter work. My handwriting is too messy for waiting tables.
BB = Big Brother
BB = Ben Bernanke
How slow am I? You coulda told me, bd.
Keep watching TV f***ktards because you enable your overlords and keep them in control. TV, Hollywood and the media control the sheep. This includes all TV including ball games. You line your masters pockets.
They all work for the Brawndo Corportion?
OH wait...that was in 'Idiocracy'.
I am not trying to live, I am trying to die ... please keep it down!
Forget financial statements by any financial corporation, instead look at their legal liabilities to prosecution for MBS securites fraud, as that is the real, yet unrealized hole in the ship hull...10 feet wide. Also their CDS exposure.
When did Cramer, et al, finally admit the reality of the Lehman collapse? Did he/they predict it before hand? 'Nough said.
thank you, exactly. I can't tell which is worse....the banks still issuing quidance on other banks and companies, the bullshit reports themselves, or that people still listen to them like nothing is happening and its all good? Am I drunk or is that too fucked up for reason? Know a very high end producer there...tried to read the corportate report and get some answers way above his paygrade and was told 'not to go there'. WTF????????
I believe Bruce will be proven correct regarding this one. A goal line stand earlier this session at 6.03 held; but today is but a Thursday, and no one seeks to be long a name such as this over this -- or any -- weekend during this period of absolute risk-off. A five-handle is a foregone conclusion, likely closing below same this coming first day of Autumn. What happens from there, Bruce K. posits one wholly plausible scenario.
What does that mean, a "five handle"?
it's a footlong sandwich at subway, plus your change back
So Bank America is worth as much as a crappy Subway sub that has mystery meat in it?
Mystery Meat it's whats for dinner.
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