Bank Of America Posts Two $100MM+ Losses In Past Quarter

Tyler Durden's picture

Remember when even the worst of all trading desks on Wall Street, that of Bank of America could do no wrong and disclosed a trading quarter of pure perfection? Yeah, that's over. The bank, which just jolted shareholders with news of material common dilution, in the form of $2.5 billion in new equity capital to be raised, has released its trading days data for Q3. Per the 10-Q: "During the three months ended September 30, 2011, positive trading-related revenue was recorded for 69 percent (44 days) of the trading days of which 47 percent (30 days) were daily trading gains of over $25 million, nine percent (six days) of the trading days had losses greater than $25 million, three percent (two days) of trading days had losses greater than $100 million and the largest loss was $119 million." On the flip side, BAC had not one $100MM+ trading win. In other words, BAC posted losses on a whopping 31% of the trading days (compared to 0% two quarters ago), something that indicates a very violent return to normalcy: after all if banks, with ZIRP, legal frontrunning, profit from default risk surges, and POMO are unable to make money 100% of the time, who else, besides all the day traders on twitter and the fine men and women on Fast Money of course, will post flawless trading records in the future?

And a very convenient chart which we hope other banks will follow suit in providing is the following presentation of the bank's VaR alongside its daily P&L. Granted, BAC could actually go ahead and mark the second axis properly, but what is most interesting is that, aside from the two $100MM+ losses distinctly highlighted (one of which obviously occurred around the time of the US debt ceiling fiasco, and the other in late August) is that the higher VaR goes, the lower the P&L trends! This has huge implications for market practice as it goes contrary to most prevailing conceptions, namely that the greater the risk, the greater the payoff on average, and, naturally, the greater the risk of a disastrous blow up. If confirmed by other banks this could serve as a policy guideline to limit excess risk-taking during times of high stress due to empirically proven adverse results on average.

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ffart's picture

Everything's fine in the U.S. financial sector everybody! Retreat to the safety and security of extremely long dated bonds and FRNs!

DCFusor's picture

How could you know either way.  To slant the report as negative as possible, the net numbers for the quarter weren't reported in the above post!  You could lose a couple hundred mil on the worst days, and more than make up for it and do well over the quarter, but you wouldn't find that out here.  And no, I'm not shilling for BAC, they are one of my favorite shorts.  But the truth is more helpful than the spin if you're a trader.

wombats's picture

ZIRP seems like a good deal for the banks, but it is actually bleeding them in lower profits on new lending due to margin compression. 

Sweet irony that Ben's gift to the banks is really a sharp knife in the back for BAC. LOL!

lolmao500's picture

So BAC is getting less insider information this time around? Good.

Taku's picture

Losses? Bets on who's getting bonuses?

MrBinkeyWhat's picture

>smirk   So that is "bad" right?


Sorry, I could not resist...

Silver/Gold in hand Bitchez!!!

Maybe some Lead/Brass combo. Not maybe...Bitchez.


max2205's picture

That $5.00 debit card fee could have stick saved the quarter. Ashamed?

Why didn't they write up their bond /debt losses? Saving em for a REALLY bad quarter?

knukles's picture

Could do a 2 for 1 stock split and dilute the losses by half. 


I really shoulda been a partner at Goldman way back when they were doing God's Work.

Catullus's picture

Issuing share to raise cash to buy back junior debt that you previously booked as a gain? Sounds like debt restructuring to me.

Dr. Engali's picture

Must have been the days their web site shut down.

Haddock's picture

More losses to be socialized whilst the other side of the trade takes the spoils.

This is true wealth destruction.

JW n FL's picture



write downs? for mortgage litigation? naaaaaaaa! who needs to do that? when those write downs will effect bonuses!

Losses? NOPE! Completely caught them off guard! Bonuses is intact!!

Got Losses?

sweep them under the rug until AFTER a Banner Bonus Year!

You sheep deserve getting robbed.. natural selection! the weak minded were taken advantage of!

Thank God for Wall Street..

Doing God's Work for him isn't easy!

Because we all know, God would have the largest derivatives book on earth! and then shift the risk to the Weak.. for they shall inherit the debt.. NOT! EARTH!!


JW n FL's picture

NEW REPORT: 280 Most Profitable U.S. Corporations Shelter Half Their Profits from Taxes.

“These 280 corporations received a total of nearly $224 billion in tax subsidies,” said Robert McIntyre, Director at Citizens for Tax Justice and the report’s lead author. “This is wasted money that could have gone to protect Medicare, create jobs and cut the deficit.”

·        30 Companies average less than zero tax bill in the last three Years, 78 had at least one no-tax year.

·        Financial services received the largest share of all federal tax subsidies over the last three years. More than half the tax subsidies for companies in the study went to four industries: financial services, utilities, telecommunications, and oil, gas & pipelines.

·        U.S. corporations with significant foreign profits paid tax rates to foreign countries that were almost a third higher than they paid to the IRS on their domestic profits.



JohnG's picture



"...with ZIRP, legal frontrunning, profit from default risk surges, and POMO are unable to make money 100% of the time, who else, besides all the day traders on twitter and the fine men and women on Fast Money of course, will post flawless trading records in the future?"



Josh Randall's picture

Rogue Traders - these people are everywhere - BAC is clearly a victim here

Iriestx's picture

Robotrader is the only person I know that has a 100% perfect trading day every day of their life.

Caviar Emptor's picture

The Hot House economy isn't perfect.....nobody's saying there can't be a leak here and there. 

But the big question after MFGlobal is still: is the Bernanke put still on? And what about the Obama call? Everywhere you look this week, the old hot house is showing cracks and leaks: Europe, China, US, Emergings. Well at least we can all get drunk together.....

Quinvarius's picture

When they busted the "expert networks" all the banks started racking up big losses.  The idiots can't trade without inside information.

navy62802's picture

A failed business model continues to fail. What a surprise!!

slewie the pi-rat's picture

thxz, tyler

timez of high stress?

even mel brooks would flee. thinking of the BAC traders and all the other corporate "trading desks" out there gambling and finding out just exactly wtf will never work! 

XitSam's picture

Don't worry, BofA will count these losses as profits because they can buy the stock cheaper now. Loss=profit. Up=down. Right=wrong.

Dingleberry's picture

Are these losses in addition to the shit they are hiding off balance sheet????  

nmewn's picture

No co-mingling for you!!!

Careless Whisper's picture

Where is Robo Trader today? He was in love with Abercrombie (ANF) two days ago. I'm no genius but I know a triple top when I see one and I posted it. Since it was down $14 today I'm thinkin' Robo may be the best contra indicator around, but I do like the guy.

camaro68ss's picture

hahaha, who would buy ANF... What a loser. selling shirts for $60 to stupid teenagers. Didnt you read the headlines lately. Teen unemplyment is at 50%. haha, no more A&F shirts for awile

I am a Man I am Forty's picture

Did we ever find out how everyone was having perfect trading quarters??  

Seasmoke's picture

what do you do at 4:01PM after you just lost $100MM

nmewn's picture

Hang out in the hallway next to a senators office.

tooktheredpill's picture

0% 2 qtrs ago - really? was the comm that good?

31% sounds great - tho on 2nd thought the volumes have been relatively high

FunkyOldGeezer's picture

My indicators NEVER give me a losing trade... just my emotions!

earleflorida's picture

ya think that programmers for robo's-algo's don't have emotions 


High Plains Drifter's picture

yeh and there is more where that came from too. 

devo's picture

This bank needs to just...go away.

MFL8240's picture

Without the ability to borrow from the Fed at 0% and lend it back to them at 4% with no risk, they are toast.  What a sham of a sytem.

Freewheelin Franklin's picture

BAC got stuck with a $149.7 million note on The Pier One Shops at Caesars in Atlantic City when the REIT that owned it, Taubman, defaulted. BAC foreclosed in April. Last week the property was auctioned off at $25 million + 1 to U.S. Bank National Association, a subsidiary of US Bancorp.The property had been appraised at about $50 million, IIRC.

If my math is correct., that's a $124.7 million loss for BAC. 



lizzy36's picture

In this filing the bank disclosed that a one-notch credit downgrade will force BAC to post an additional $3.2B in collateral.

Which begs the question of what bad news are the aware of coming down the pipeline that is going to cause another downgrade?

Enquiring minds.......

Snakeeyes's picture

I thought you meant this: Freddie Mac Asks Treasury For Another $6 Billion - Running Tab to Taxpayers is $56 Billion; Freddie Pays CEO $2.3 Million in Bonuses

$2.3 billion in bonuses to a CEO that saddled taxpayers with $51 billion in losses.

Imagine if he had MADE money?

msmith's picture

The SPX may be ready for a sustained move lower.  Gold appears ready to complete its correction lower.  Also the USD looks very bullish across the board for the major currency pairs.  Intermarket analysis is telling us that "risk off" is certainly coming, and likely very soon.

John McCloy's picture

Annndd as anticipated they are diluting shares once again. Everyone here short banks since last year called this and knew it was inevitable much like the coming nationalization of all banks in under two years. They have no profits or certainly nothing sustainable.

   Anyone investing in firms that need to:

a) Transfer loss provisions to EPS (In the height of increasing foreclosures)

b) Reliant upon mark to market to appear solvent as of those write downs are not inevitable in the future

c) 3 years of steroidal monetary policy which will never be repeated nor be sustainable via ZIRP

d) Purchase CDS on their own firm to temporarily profit

e) End of quarter Repo magic to give the appearance of lower risk

f) Absorbed the malignancy which is Country Wide & Merrill legacy losses

   Is deserved of losing their money but the true story is nobody owns these shares. All of the shorts have been scared away..all of those easy gains and ramps were stolen well back in 09 and 10 and there truly is nobody left to fight the Fed. This market has been superbly set up for the past 3 years to implode in less than a week because it no longer functions as a market.

     The Global market indecies can best be categorized as the "Bailout/Central Planning Index". It is no longer a market that trades on fundamental data for more than 24 hours (IF THAT). It is a market that trades along the lines of endless ponzi cash infusions and political screw jobs that with 100% accuracy affix the taxpayer and middle/upper middle class with the tab. Every move the market makes is based upon rumor or soon to be confirmed rumor. It can afford not a single monkey wrench and requires global coordinated planning. The same sort of planning that can dictatorially behind closed doors bring a end to a referendum and prevent a resignation. 

        Every stock, ES, Commodity and Ramp job is done because those with the leverage know or believe they know with 100% certainty that everything will be done to float the markets for another day. If it is a China bailout rumor, austerity rumor, vote of confidence passage, QE, EFSF expansion it is irrelevant. They proceed as if they own all the chess pieces and either the media via a rumor will spin the plates until it comes to fruition or the purchased politicians make it so. Nothing is being left to chance which is what makes this so dangerous and inevitable. 2008 and Lehman will have nothing on this collapse. Record unemployment, food stamps, global riots, commod costs, debt levels and all of this after ever single hand has been played and replayed to levitate markets. 

       This is like Jenga with a record 98 levels built but all it takes is one nation or one geopolitical event. All is required is the stupidity of an attack on Iran to send Oil to 135 or inevitable upcoming elections in these EU nations that send all the bankster owned packing and repudiation of all debts. Greek elections are coming shortly and that will end all austerity measures or at least all debt obligations and as soon as the first route occurs all of the other pols will get in gear to preserve their jobs and bend over backwards to appear that they are for their own sovereigns and not the banks and it all ends. 

       The EUR is going to parity and well beyond. Ben has a year left as chairman at best...the charade is up..WE HAVE RECORD LOW MORTGAGE RATES AND NOBODY IS BUYING A HOME..PRICES ARE STILL DROPPING. They have attempted desperately to recreate the mother of all bubbles and even I believed they could have done it one last time but Dr. Housing it telling us this nation is broke and not only broke but at insurmountable personal debt levels with record graduation of college student with debt and no job prospects and their parents have all HELOCe'd their homes to oblivion to send them to Rutgers with a degree in fine arts. 

         3 years now of 0% rates and nothing but more socialization of Fannie & Freddie losses and higher prices to show for it. Those home prices of 2006 are long gone and not coming back for 30+ years. They always were false and the sooner people begin to understand that we need prices 70% lower from here on homes is the sooner actual growth through liquidation of debt can occur. Hold cash, hold gold, hold silver and hold your loved ones tight because it took us 25+ years to exit the first depression and this one will take us bare minimum 40. 

  Focker Out!

NumberNone's picture

Just heard Warren Buffett say that the only thing going on his bathtub from now on is masturbation and self-performed prostate exams.