BAC Breaks 4 Handle, Drags Entire Market Down

Tyler Durden's picture

As definitive evidence just how fucked up this entire market is, here is what happens to the ES the second the infinite BAC Bid at $5.00 finally gets taken out. This is the ESH2. That's right - the entire market moved tens billions in market cap because the Plunge Protection Team just failed at protecting the "precious" $5.00 level.

Goodbye $5.00 BAC, we hardly knew ye:

Those in pain:



h/t Hedgeless Horseman

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Bodhi's picture

I'm all tingly inside.

CORNGUY's picture

I am so happy right now.

transaccountin's picture

Can someone comment on the margin requirements? I know that once a stock goes below 5 its more stricter, yes?

Captain Benny's picture

Many brokers have increasing margin requirements as stocks trade lower.  When closing at $4, the margin requirements are HUGE at most major brokers.  $5 is the point when most major funds realize they need to get out. Also, some funds expressly forbid < $5 stocks due to volatility ... nobody likes penny stocks.


I'm overjoyed that bathtub coke loving Buffett is crying today...

redpill's picture

A nice warm bath with salts and $7.14 warrants, bwahahaha

camaro68ss's picture

buffet has lost 1.5 billion with BofA. hahahaha what a loser!

kito's picture

im not at all defending him here, but he is not looking at what happens months after he purchases a stock. lets wait till bac is dust before dancing on the grave.............

Manthong's picture

The important thing might be SPX under 1200.

tooktheredpill's picture

Buffet a loser? So I guess all your calls are correct? Any idea what options he has? 


mr_T's picture

How much for 1 rib?
1 BAC share?

SokPOTUS's picture

Heh.  More like a *McRib*.

cranky-old-geezer's picture



Back in summer didn't someone put a billion dollar short on BoA at $5 strike?

AldousHuxley's picture

don't underestimate the oracle, he knows how to play the game that is wall st. It is by no concidence that he owned banks, rating firms, new he owns political insiders at the very top...Obama.


He gets $300M divds every year no matter the stock price, so even if BAC goes down 50% to $3.5ish, he lost $2.5B in equity, but earned $300M x 8 years he would have pretty much broke even with $2.4B in divds + BAC will pay him $250M when they buy his shares back.


Don't forget he also got options for free.


Buffet makes money unless bank of america gets nationalized or goes to zero. Obama will make sure neither will happen.


plus he may have hedge his position with Citibank short. who knows.


All I know is you and I CANNOT get the same deal buffet gets. Free market? yeah right.








MillionDollarBonus_'s picture

Couldn't have put it better myself. The honourable Warren Buffet (presidential medal of freedom winner) is simply buying when there is blood in the streets. While the ZH doomers jump up and down in a frenzy of masochistic glee, Mr Buffet is calmly picking up value stocks at bargain prices. And his courage is truly something to be admired.

Pladizow's picture

Far from your best - Cast another line!

Mr Lennon Hendrix's picture

That's not bad, I mean, Buffet is down 20%, right, so now is a great time to buy!

Buy everybody!  Buffet is!

AldousHuxley's picture

for common yes, but preferreds are down only 9% and buffett gets 6% annual



pupton's picture

@Kito - When MDB glowingly endorses your post, you know you fucked up...

HileTroy's picture

Good one MBD if the rest of my honorable ZH borthers and sisters don't get your sarcasim its a shame. You are consistant in your mockery. 

giddy's picture

ummmm... very courageous to face the hoards of crony capitalist bitchez... 

erg's picture

I myself never once cracked even the most mildest of grins because of one of your posts. I honestly cannot figure out why anybody would bother to give you any credence at all.

...the government is a wholesome purveyor of liberty and free markets. The gods shine upon them. We should swear complete fealty to these lovings leaders."...or some such bullshit. It may have been mildly amusing once. It's peurile to me.

cranky-old-geezer's picture



Hey MDB, weren't you a bit sad over Kim Jong Il's death?

Then maybe not.  Perhaps you're looking forward to his son being even more ruthless.

sodbuster's picture

Blood in the streets? Maybe it's Buffet's?

q99x2's picture

Use the NDAA to send the financial terrorist to Guantanamo and front run his empire. I'm sure at least a few rats in the sinking ship are drawing up gameplans now.

unununium's picture

Uncle Warren has lost it if he did not exercise those warrants when BAC was at $8.xx in the days after his investment was announced.

TruthInSunshine's picture

And Sell-Side Wall Street & The Banks sing out:



Ben Bernankio

Send us a dream

Monetize quadrillions with your Fed Reserve team

Make The Bernank-CERN printer scream


Ben Bernankio

You must plug this dam

We're losing money

We're in a real jam


Timmay Geithner

Send us a dream

Make it all TARP-like

Like we've never seen


Timmay Franz Geithner

Please get more taxpayer blank checks

Our toxic assets

Are causing bondholder defects


Bernankio & Timmay Please send us a dream!



LeBalance's picture

Mr. Krishna make us a hammer,

disabuse us of our lack of responsibility,

make our resolve to care for ourselves through our growth,

beyond the pain that we will feel in piercing our dream-like state,

as we emerge into the horror (the horror) of the larger reality,

we will quiver in fear, but Mr Krishna stands with us and is us,

to make it obvious that we have arrived.

(stare in the mirror and you see Mr. Krishna.)

(he is Tyler Durden and you are the narrator.)

( "you've met me at a really strange time in my life." )

DosZap's picture

buffet has lost 1.5 billion with BofA. hahahaha what a loser!


I think most here figured he would maybe live to regret that one...........

LeBalance's picture

please quantify with notarized receipts exactly whose money he invested.

you think it was his?

he is a hood ornament of the squid.

he doesn't show the symptomology as much as folks like Munger and Franks do.

but he is nonetheless.

Dixie Rect's picture

Warren Bufoon, what a maroon! hehehe

Dugald's picture

Nah?  surely, its all just a fiendish plot........

JailBank's picture

I have a feeling that the tax payers will be some how covering Warren's bets.

EvryInternational's picture

You know that's a fact. I'm no fan of BAC, but in the end, the whole country would have to go down before BAC (and a few select others) are left to fry. Warren's fine. He's connected. Most of his terribly bad looking bets paid out - betting against him as proven that you don't know as much (or have as many buddies in the right places) as he does.

I don't think there are any connected billionaires here calling Warren out...

RemiG2010's picture


Someday, you are going to thank him for what he did for the country during last eight months... but that's the secret... secret secret! Money was the last thing on his mind!

PS -1

eurusdog's picture

And're a billionaire investor?

Freewheelin Franklin's picture

buffet has lost 1.5 billion with BofA. hahahaha what a loser!

Yeah, but, there's always Becky

Nobody For President's picture

OOOps. I read this and got a tingly flash as the old saying "He who laughs last..." flashed through me head.

All I know is that sob is one fuck of a lot by several orders of magnitude richer than I, and I suspect thou, and it ain't over. The question may be, is BAC TBTF, and will his buddies at the White House and Fed make it all better, or will BAC be whacked up and parceled out to the Squid, JPM and other present survivors?

Maybe we could pass it over the sea to Mario (either one of them - the *origianal Bank of America started as the Bank of Italy in San Francisco).


Freddie's picture

Someone needs to take a Nebraska corn cob, dip it in mercury and shove it up Buffett's.......

MeanReversion's picture

Frankly Buffet doesn't care, Buffet owns preferred shares (not common equity) which are not traded on any market.  As long as BAC doesn't go bankrupt (and the U.S. would never allow that to happen), then Buffet gets paid.

Freddie's picture

Buffett is such a devious ***k that the avg Joe's ran out and bought the common stock thinking they were buying what Buffett was buying.  Poor sheep.

Captain Benny's picture

I didn't read the details, but IIRC ....  Buffet's stock converts to common.  He's pretty much fucked just like the common holders, maybe not as bad... but still fucked.

redpill's picture

There were two parts to the deal, the $5 billion in preferred stock which gets him a 6% dividend (pretty frickin' outstanding), and warrants for common stock at $7.14.  Now obviously he won't be exercising the common stock warrants any time soon, and his preferred shares are probably technically worth less, but if he's making a 6% dividend it's still a pretty sweet deal considering you can't get yield for shit anywhere these days.  Unless of course BAC goes tits up, in which case he's out the $5 billion.  Then the bathtub becomes a swimming pool!

Freddie's picture

Buffet is the muslim's golden boy.  Ditto with Corzine.  Dems do not lose or go to jail.  Corzine and Buffett need to be "sanduskyed"

Bananamerican's picture

jesus Freddie...

did a Democrat give you that funky haircut/makeover?

give it a rest ya partisan fanboy...