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Bank Of America Scrambles To Defend Itself From Henry Blodget's Allegations It Is Massively Undercapitalized

Tyler Durden's picture





 

Early this morning, Henry Blodget penned a post titled "Here's Why Bank Of America's Stock Is Collapsing Again" in which he used Zero Hedge data among other, to determine that the capital shortfall for the bank is between $100 and $200 billion. It took BAC exactly 6 hours to retort. Below is the full statement.

BANK OF AMERICA STATEMENT REGARDING HENRY BLODGET
2011-08-23 16:29:04.675 GMT

 

(The following is a reformatted version of a statement from Larry DiRita, a Bank of America spokesman. The statement was confirmed by the sender.)

 

Mr. Blodgett is making “exaggerated and unwarranted claims” which is what the SEC stated publicly when he was permanently banned from the securities industry in 2003.  The sovereign exposure is off by a factor of 10.  The commercial real estate figures are off by a factor of four.  The mortgage analysis was provided by a hedge fund that has acknowledged it will benefit if our stock price declines.  The recommendations on goodwill accounting would be prohibited by generally acceptable accounting practices.  Traditional bank valuation relies upon tangible book value per share, which excludes by definition 100 percent of goodwill and other intangibles.  As of June 30, our tangible book value per share was $12.65.

Oh ok, Bank of America, that explains it all. As for the mortgage analysis being provided by a hedge fund "that has acknowledged it will benefit if our stock price declines", co-authored by Zero Hedge, does that make it wrong? Last time we checked Muddy Waters made money on Sino Forest...

 


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Tue, 08/23/2011 - 12:37 | Link to Comment hambone
hambone's picture

Stocks rock - Gold sucks...the market tells me so.

Tue, 08/23/2011 - 12:38 | Link to Comment trav7777
trav7777's picture

well fuck, they stuffed CFC and MER inside BAC, wtf did they expect when these rats finally chewed their way to the light?

Tue, 08/23/2011 - 12:43 | Link to Comment bankrupt JPM bu...
bankrupt JPM buy silver's picture

why is the XLF rallying if they are all going to zero?  Here comes the shit show....

 

www.silvergoldsilver.blogspot.com

Tue, 08/23/2011 - 13:02 | Link to Comment spiral_eyes
spiral_eyes's picture

Here's what happens if QE3 doesn't happen...

http://azizonomics.com/2011/08/23/what-if-qe3-doesnt-happen/ 

Tue, 08/23/2011 - 13:14 | Link to Comment hambone
hambone's picture

Once this rally loses it's up trend line...watch out.  Could come back down and retest 1101 in short short order.

Tue, 08/23/2011 - 13:27 | Link to Comment Fish Gone Bad
Fish Gone Bad's picture

Fuck Bank of America.

Tue, 08/23/2011 - 13:43 | Link to Comment JW n FL
JW n FL's picture

 

 

Some of WikiLeaks' Bank of America Data Destroyed

Some internal Bank of America files obtained by WikiLeaks have been destroyed, according to a former close collaborator of Julian Assange, the whistleblowing website's founder.

In an email to Reuters, Daniel Domscheit-Berg, who last year was fired by Assange as WikiLeaks' co-spokesman, confirmed that he had destroyed "roundabout" 3,000 submissions WikiLeaks received related to Bank of America.

http://www.banktech.com/risk-management/231500497?cid=nl_bnk_daily

Tue, 08/23/2011 - 13:47 | Link to Comment JW n FL
JW n FL's picture

 

 

 

U.S. Bank Earnings Up From A Year Ago

U.S. bank earnings continue to increase but the trend is mostly due to institutions setting aside less to guard against losses, a top regulator said on Tuesday.

The Federal Deposit Insurance Corp said that the industry earned $28.8 billion in the second quarter, a $7.9 billion increase from a year before.

http://www.wallstreetandtech.com/asset-management/231500555?cid=nl_wallstreettech_daily

Who said that the Debt Ceiling being raised was a bad thing? QE1 and QE2 worked really well!!

Tue, 08/23/2011 - 13:50 | Link to Comment Careless Whisper
Careless Whisper's picture

oh please, the whole wiki / b of a story smells.  i'm thinkin' that they either had nothing to begin with or maybe they got a nice contribution to do the data dump... who knows.

Tue, 08/23/2011 - 13:50 | Link to Comment Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

Yeah, saw that yesterday. I guess that tells us whose dick Mr Dumscheit sucks.

Tue, 08/23/2011 - 14:41 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

Domscheit-Berg?

Huh. Is that pronounced "dumb shitbird"?

Tue, 08/23/2011 - 14:15 | Link to Comment IQ 145
IQ 145's picture

Please, let's have a little sensitivity here; I own 1000 shares at $7.37; and before long you will have an opportunity to bail me out at a nice profit. HA HA. Come one, taxpayers we're rooting for you. Wait a minute, I'm a tax payer; hmm. this is getting confusing.

Tue, 08/23/2011 - 17:01 | Link to Comment AbandonShip
AbandonShip's picture

Yeah man, I'm confused too.  I hate BofA but I think I hate Blodget more.  What to do?

Tue, 08/23/2011 - 13:31 | Link to Comment eureka
eureka's picture

How about re-testing 1050?

Is Dick Bove just a bonehead, or a liar/cheerleader?

Dick says BAC is smack with capital and "deposits pouring in" ... - WTF...?

If the latter is true, who's depositing? The Bernank or the sheeple?

http://www.bloomberg.com/news/2011-08-23/bofa-has-no-reason-whatsoever-t...

Tue, 08/23/2011 - 13:51 | Link to Comment Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

Dick is mostly a bonehead, which makes the lying/cheerleading easier, since you don't have those pangs of conscience bugging you while the camera's on. The only "deposits" at BofA would be the steaming turds left by the front door of newly ex-customers.

Tue, 08/23/2011 - 13:27 | Link to Comment Stax Edwards
Stax Edwards's picture

He s e, we get it, you have a blog that no one cares about, so you cite it in the first few comments on every single post.  We get it.  If you have not built up a following by now its not gonna happen by repeating yourself ad-naseusm.  Can you give it a rest or do like the rest of the advertisers and buy some click thru ad space?

Tue, 08/23/2011 - 14:46 | Link to Comment CompassionateFascist
CompassionateFascist's picture

That S&P graph for the past month. Let's call it the "beached whale" curve. Like our entire economy.

Tue, 08/23/2011 - 12:45 | Link to Comment TruthInSunshine
TruthInSunshine's picture

 

 

 

08-23 12:28: 24/7 Wall St Writes: JP Morgan may take over Bank of America

 

WTF!!!!??????

 

MORE TAXPAYER RAPINGS (minimum 100 Billion). AIG Part Deux!!!

DOWN WITH THE BLOODY WALL STREET PONZI

RESIGN, GEITHNER & BERNANKE. RESIGN !!!!!!!!!!!

Tue, 08/23/2011 - 12:56 | Link to Comment j0nx
j0nx's picture

Good so now I know who I will be paying 10c on the dollar to for my BOA credit card debt. I already told Chase to fuck off in the worst possible way 10 years ago after I paid them off and have no trouble doing it again this decade.

Tue, 08/23/2011 - 13:10 | Link to Comment TooBearish
TooBearish's picture

Tyler gunna bitch slap u then lecture u on links to hack web sites like this one

Tue, 08/23/2011 - 13:22 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Hi Sock Pupper version 3.0

Have fun trolling while it lasts for you.

Tue, 08/23/2011 - 13:56 | Link to Comment Byte Me
Byte Me's picture

Do come back often when your command of the English language reaches 7th grade level.

'Til then -- fuck off...

Tue, 08/23/2011 - 13:30 | Link to Comment glenlloyd
glenlloyd's picture

out come the really horrible ideas, like lets' have JPM takeover a failing BAC.....would be even more TBTF.

OTOH...BAC might just be enough poison to kill the new host....just maybe?

Tue, 08/23/2011 - 13:37 | Link to Comment doggings
doggings's picture

08-23 12:28: 24/7 Wall St Writes: JP Morgan may take over Bank of America

WTF!!!!??????

MORE TAXPAYER RAPINGS (minimum 100 Billion). AIG Part Deux!!!

DOWN WITH THE BLOODY WALL STREET PONZI

RESIGN, GEITHNER & BERNANKE. RESIGN !!!!!!!

anybody who has been keeping up with the SilverGoldSilver bears would know this already.  SGS basically announced was coming this via teddy bears 2 weeks ago. 

http://silvergoldsilver.blogspot.com/2011/08/part-7-silver-bears-talk-of-epic.html

Tue, 08/23/2011 - 13:48 | Link to Comment eureka
eureka's picture

I told a friend two weeks ago. Intuition has no filters. Isn't it an obvious repeat of 08/09? WFC will probably get C.  Consolidation Bitchez - bigger too big to fail bankster capital collectives courtecy of the elite.

Will the sheeple react? Will the Tea Party? Will zerohedge readers stop reading and start blowing up banks?

Tue, 08/23/2011 - 20:08 | Link to Comment Kali
Kali's picture

Maybe that's what Uncle Warren was talking to lil Barry about.  : )

Tue, 08/23/2011 - 12:45 | Link to Comment Popo
Popo's picture

 

OMG.  That's **ALL** BAC had up their sleeve?   An ad hominem attack?

Hehehe.... Short this pig to fucking ZERO.   I can think of no greater admission of absolute terror on BAC's part.   They had **NOTHING** to fire back with.

Honestly, that was one junior-varsity display of public relations skill if I've ever seen one.    Target all weapons and fire at will.     

Dive Dive Dive!    AROOOOOGA!

 

Tue, 08/23/2011 - 13:17 | Link to Comment Crack-up Boom
Crack-up Boom's picture

Seriously!  When you have to resort to logical fallacies, you're out of bullets.  Somebody just put BOA out of its (our) misery!

Tue, 08/23/2011 - 13:58 | Link to Comment Careless Whisper
Careless Whisper's picture

every time i read another story about b of a i feel like i'm watching the hudsucker project

http://www.youtube.com/watch?v=vldMyJmaVjk

 

Tue, 08/23/2011 - 20:05 | Link to Comment Tunga
Tunga's picture

... and we're gonna call it the "Edsel"! Whadda you think?

Tue, 08/23/2011 - 12:46 | Link to Comment slaughterer
slaughterer's picture

Branch Hill Capital/ZH/HenryBlodget -vs- BAC

1: 0 (for not providing exact figures, but just stating "factor of..." over and over, smearing Henry, and not mentioning Tyler...)

Tue, 08/23/2011 - 14:54 | Link to Comment CompassionateFascist
CompassionateFascist's picture

Henry's a pig; an avid, mischievious little kid who never grew up. He thinks Trig is Sarah's brat, not the daughter's. Absurd. OrIzzit?

Tue, 08/23/2011 - 13:24 | Link to Comment Smiddywesson
Smiddywesson's picture

Oh, I wouldn't be so hasty troll.  Two weeks ago,1858 was a real good price.  Two weeks from now, 2085 will suit me fine.  If it keeps going up, I don't mind giving up profits.  Apparently you don't mind either, because you game back all the profits since 2000,

Tue, 08/23/2011 - 12:38 | Link to Comment John McCloy
John McCloy's picture

  We know dilution is coming and that is unavoidable. Time to issue more shares Brian.

Tue, 08/23/2011 - 12:41 | Link to Comment DefiantSurf
DefiantSurf's picture

who would buy the dilution?

Tue, 08/23/2011 - 12:55 | Link to Comment Pladizow
Pladizow's picture

Uncle Sam, i.e., those who have always, and will always get fucked - the US tax payer.

Tue, 08/23/2011 - 12:47 | Link to Comment slaughterer
slaughterer's picture

I think another 50 billion shares priced at $2 would suffice for 1 or 2 years more.  Could always R/S 10:1 to make it look respectable later.  

Tue, 08/23/2011 - 20:34 | Link to Comment unununium
unununium's picture

Haaaaa that's only 150 shares for every man woman and child in the USA.  Nationalization, bitchez.

Tue, 08/23/2011 - 12:40 | Link to Comment Boilermaker
Boilermaker's picture

Depends what you mean by massively?  If by it you mean gi-normously on a biblical scale...then, yes.  If you mean just the normal massively, then no.

Tue, 08/23/2011 - 12:39 | Link to Comment mberry8870
mberry8870's picture

Me thinks he doth protest too much!

Tue, 08/23/2011 - 12:39 | Link to Comment Two Towers AU AG
Two Towers AU AG's picture

How much time does it take to get the money out of a failed bank.. considering my deposit are lower than the 250000 USD insured amount....

Tue, 08/23/2011 - 12:44 | Link to Comment New_Meat
New_Meat's picture

I'll get back to you on that.

Tue, 08/23/2011 - 13:21 | Link to Comment scatterbrains
scatterbrains's picture

lol I luv ZH!!

Tue, 08/23/2011 - 13:11 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

It depends on if the roads are passable

Tue, 08/23/2011 - 13:41 | Link to Comment optionsoptions
optionsoptions's picture

If your deposits are under $250,000 then you won't even notice the bank failed. It will take a second at the same branch you always go to but with a different name.

 

ps. These deposits held at BAC are actually their liability. They are swimming in deposits that they can't/won't loan out so this would be helping their Capital Ratios.

Tue, 08/23/2011 - 12:39 | Link to Comment oogs66
oogs66's picture

wasn't it a hedge fund that said over and over that lehman was a house of cards and would collapse?  thing he was right and now owns the mets

Tue, 08/23/2011 - 13:01 | Link to Comment zenbones
zenbones's picture

But he owns the Mets and is now wrong.

Tue, 08/23/2011 - 12:40 | Link to Comment reader2010
reader2010's picture

Bank of America will NOT be allowed to fail, and will be bailed out at the global taxpayers' expenses. 

Tue, 08/23/2011 - 12:44 | Link to Comment CClarity
CClarity's picture

Au contraire!  The depositors will be covered by FDIC and if need be taxpayers.  Banking services will persist at BofA, but stockholders, preferred and otherwise, will NOT be bailed this time.  Bond holders in some jeopardy too, but less as the banking entity will live on.  Small percentage that it will actually be nationalized if European authorities go that route.  

Tue, 08/23/2011 - 12:52 | Link to Comment Johnny Yuma
Johnny Yuma's picture

Uh... Sorry, the FDIC does not have the funds to cover BofA's deposits. If taxpayers cover this, there will be massive consequences. What will most likely happen is BofA will be dismantled with another big bank buying up the "good assets" while the rest are, dare I say, guaranteed by the Fed or Treasury and sold in smaller tranches to investors. Should this come to fruition, BofA will be dead and gone. 

Tue, 08/23/2011 - 12:58 | Link to Comment Lucius Corneliu...
Lucius Cornelius Sulla's picture

The USG will sell bonds to fund the FDIC. 

Tue, 08/23/2011 - 13:37 | Link to Comment BlackholeDivestment
BlackholeDivestment's picture

...that was sooo funny. Thanks for that.

aaah, what a sick world.

Tue, 08/23/2011 - 20:35 | Link to Comment unununium
unununium's picture

Sheesh.  DO I have to draw you guys a picture?  What do you think QE3 will be for?

Tue, 08/23/2011 - 13:00 | Link to Comment lolmao500
lolmao500's picture

LOL at the FDIC. Unless congress passes some kind of emergency 1 trillion $ additional fund for the FDIC, they won't have enough money... and even 1 trillion might not be enough.

Tue, 08/23/2011 - 13:03 | Link to Comment CClarity
CClarity's picture

BofA does not have $1Trillion in deposits.

Tue, 08/23/2011 - 13:13 | Link to Comment laomei
laomei's picture

14 Jun 2011 – Nationwide, JPMorgan ranks second in deposits with $996 billion, behind Bank of America's $1.02 trillion

You're all so fucked... all i can think of is your mom and a horse

Tue, 08/23/2011 - 13:15 | Link to Comment Lax Accounting
Lax Accounting's picture

Straight out of their most recent 10Q:

 

Deposits: $1,038,408,000,000

 

So I guess you are right, they don't have $1 trilliong in deposits. They have MORE.

Tue, 08/23/2011 - 13:35 | Link to Comment lolmao500
lolmao500's picture

Thanks much for these numbers.

Do you have the FDIC current balance? Thanks.

Found it... FDIC has $10 billion... Mwahahahhahaha

Tue, 08/23/2011 - 13:44 | Link to Comment UGrev
UGrev's picture

I don't know if this is what you're looking for:

http://www.fdic.gov/about/strategic/report/2010highlight/chpt3-01.html

Tue, 08/23/2011 - 13:50 | Link to Comment lolmao500
lolmao500's picture

Well from more recent...

http://theinvestmentauthority.com/investment-news/fdic-insured-instituti...

The contingent loss reserve, which covers the costs of expected failures, fell from $13.8 billion to $10.3 billion during the quarter.

Tue, 08/23/2011 - 14:16 | Link to Comment fishface
fishface's picture

Empty the pockets bitchez

Tue, 08/23/2011 - 14:05 | Link to Comment NotApplicable
NotApplicable's picture

Here's their latest quarterly update. as of June they have $3.916B to cover $6.539T in deposits.

But, since it is a gov operation cash flow is meaningless, as it just goes in the red, until they squeeze the banks for higher fees to cover the next collapse.

http://www2.fdic.gov/qbp/2011jun/fund.html

Tue, 08/23/2011 - 15:45 | Link to Comment Lucius Corneliu...
Lucius Cornelius Sulla's picture

The FDIC will protect depositors but I am sure that most of the losses will be taken by stockholders and bondholder haircuts.  I don't think Uncle Sam can afford to be nice anymore.  I seriously doubt that the public will stand for another TARP bailout.  That means that the FDIC will need a fraction of total deposits to hold them in temporary receivership.  But still, probably more than they have in reserves. 

Tue, 08/23/2011 - 18:44 | Link to Comment Johnny Yuma
Johnny Yuma's picture

When events like this occur, people and institutions become very wary of the bank and start pulling their money out as fast as they can. I'd be curious to see what BofA's deposits trend has been since this has become a newsworthy issue. Same thing happened in 2008 and many of the troubled banks lost a lot of deposits out of fear of a bank failure. I think people will be quicker to react this time around as many did lose money in some of the smaller banks if they exceeded the FDIC limits. Pretty sure BofA is bleeding internally by now. 

Tue, 08/23/2011 - 13:23 | Link to Comment centerline
centerline's picture

If BOA is allowed to fail, the whole game comes apart.  Too much counterparty exposure.  Too large a deposit base.  There will certainly be a "bailout."  But, it will likely be way more sinister this time in order to avoid public backlash.  Going to be interesting to see how they pull this off.  But, rest assured the only folks that will take it in the rear here are the taxpayers... again.  Same story again and again until the ponzi breaks.

Tue, 08/23/2011 - 14:21 | Link to Comment IQ 145
IQ 145's picture

This is obvious; and it's one reason I bought some stock in it; but you don't want to state factual thesis here; it upsets the hive mind.

Tue, 08/23/2011 - 12:40 | Link to Comment Astute Investor
Astute Investor's picture

How soon until Blodget mysteriously dies in a "swimming accident" in the Hamptons?

Tue, 08/23/2011 - 12:43 | Link to Comment skohiu
skohiu's picture

More likely a heart attack

Tue, 08/23/2011 - 13:02 | Link to Comment zenbones
zenbones's picture

Must avoid hot tubs.

Tue, 08/23/2011 - 14:07 | Link to Comment NotApplicable
NotApplicable's picture

You're confusing a scape-goat with a trouble-maker. One is desired, while one is not.

Tue, 08/23/2011 - 12:40 | Link to Comment RobotTrader
RobotTrader's picture

 

 

TPTB is attempting to "Nipple Bottom" paint BAC on the daily, and paint a massive bearish candle on gold.

Hey, whatever it takes to rotate the hot money out of gold and back into the XLF.

Never amazes me to see how rabid the bottom fishers are.

Tue, 08/23/2011 - 12:50 | Link to Comment baby_BLYTHE
baby_BLYTHE's picture

the banks are totally insolvent and only exist on the pretense of printed FED money and accounting trickery.

the FED will throw themselves and the US currency onto a rusty nail before they let any "crash" occur- which is the entire predicate of the chaircreature's thesis: No bank will fail and everything will be exhusted to ensure that outcome- even if it means dropping dollar bills out of helicopters

Gold is trying to tell us something just as it has consistently for the past couple thousand years. Are you listening?

There is nothing "massively bearish" about the price action in gold today. Many, including myself, are breathing a sigh of relief that gold is consolidating some gains after a massive run-up. It is now the world's defacto reserve currency and is behaving in the complete opposite fashion then it did in 2008.

Those that continue to shrug off what gold is saying, deserve the cooking they are about to eat.

Tue, 08/23/2011 - 12:59 | Link to Comment Confused
Confused's picture

BB,

 

I realize its become the thing to do to hate on Robot. But he did start that comment off with "TPTB" are TRYING to........

 

I don't think he was claiming that there was anything massively bearish about the price action of gold today.

Tue, 08/23/2011 - 13:44 | Link to Comment sgorem
sgorem's picture

whew! for a minute there I thought Robo was serious and I'd have to sell my lone 5 gramer. Actually, any of you that think, believe in, trade in, suck in, anything that touches the likes of this Fraudulent Farce in Wall Street, OR the USSA government are in for a Big FUCKING Awakening. Good to see you gold and silver bashing trolls out today. not.

Tue, 08/23/2011 - 13:03 | Link to Comment Lucius Corneliu...
Lucius Cornelius Sulla's picture

The FED is powerless.  They are getting pressure from all sides now. Internal and external.  The main concern of the Bernanke at this juncture is the survival of the institution.  Putting a bunch of crap mortgages on their balance sheet is completely out of the question.  Junk bonds (especially bank bonds) are going to take a beating along with gold.  Get ready for a melt-down!

Tue, 08/23/2011 - 13:07 | Link to Comment baby_BLYTHE
baby_BLYTHE's picture

the problem with your premise is that he has already destroyed the FED. They already have sacrificed their credibility. Ben knows, and so does everyone else, he will be the last FED chairman.

Tue, 08/23/2011 - 13:40 | Link to Comment Lucius Corneliu...
Lucius Cornelius Sulla's picture

QE2 sacrificed their credibility.  That is why I think QE3 is unlikely or reserved for desperate measures ... like the S&P breaking the '09 lows.  It won't work.  The house of cards is about to collapse.  The FED will be lucky to monetize T-bills.  Even that will cause a huge uproar among the Arabs, Japanese and Chinese.  Americans are fattened sheep being led to the slaughter house.  There won't be any resistance there...

Tue, 08/23/2011 - 13:53 | Link to Comment baby_BLYTHE
baby_BLYTHE's picture

so you will really believe the FED will throw in the towel after they themselves even take credit for putting the brakes on "A Second Great Depression"? You think Ben will really let it all come crashing down after two and a half years stuffing this pig?

No one ever brings this up, but during his previous 60 Minutes interview Benocide said QE 3 was 'very possible', that interview was quite awhile ago too. I guarantee you they will try it (even if it doesn't work) QE 3 before they allow cascading defaults to occur.

You guys are the experts though. I could be dead wrong.

Tue, 08/23/2011 - 14:05 | Link to Comment Lucius Corneliu...
Lucius Cornelius Sulla's picture

Not an expert.  But I do think that the primary line of defense will be the T-bill and thus the ability of the USG to fund itself.  That means low, low rates for a long, long time.  That conclusion has drawn me to believe that junk bonds and even GSE paper will be sacrificed and the final line of defense (the ability of the USG to borrow) is likely to hold.  Does that mean there will be QE3?  Maybe.  But I bet it will be strictly comprised of T-bills.

Tue, 08/23/2011 - 20:37 | Link to Comment unununium
unununium's picture

In the same interview he said he could raise rates in 15 minutes.  Now he says he won't for 2 years.

Tue, 08/23/2011 - 13:05 | Link to Comment Winston Smith 2009
Winston Smith 2009's picture

"the FED will throw themselves and the US currency onto a rusty nail before they let any "crash" occur- which is the entire predicate of the chaircreature's thesis: No bank will fail and everything will be exhusted to ensure that outcome- even if it means dropping dollar bills out of helicopters"

Nope, that'll never happen because they know if they pull a Zimbabwe then _everyone_ loses and they'd have a violent revolution in short order as everyone but Bill Gates starves.  Eventually, the Ponzi prop-up games will end and large portions of the 25 TRILLION dollars of unsupportable debt in the US economy will default, causing massive DEFLATION.

Have a listen:

http://www.blogtalkradio.com/marketticker/2011/08/22/tba

Tue, 08/23/2011 - 13:34 | Link to Comment centerline
centerline's picture

The deflationary collapse is certainly plausibe.

I wanted to add something here though.  In the Zimbabwe scenerio, it would not be the FED that pulls the trigger on the helicopter drop.  It would be politicians - and the people themselves!  The stage has been set for this for some time now.  And the Fed alluded months ago that any further "easing" would be only if they lost thier independance.  Basically, as the system begins to slip into profound deflation, everyone will clamour for cash - and the politicians will provide exactly that at all costs.

Of course, the above is just another guess at what might happen with emphasis on redirecting the blame for a currency failure away from the central banking, debt-money scheme towards politicians and social decline.

 

 

Tue, 08/23/2011 - 12:50 | Link to Comment Cleverbot
Cleverbot's picture

You see, you are smart. I still believe in you.

Tue, 08/23/2011 - 12:57 | Link to Comment reader2010
reader2010's picture

The problem is some have eventually figured it out that the emperor has no cloth. The ultimate protection is cash flow?

Tue, 08/23/2011 - 13:14 | Link to Comment ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

Hey Robo!

 

I missed you during the time gold was skyrocketing and financials collapsing.  If only you could have run commentary then.

Tue, 08/23/2011 - 12:41 | Link to Comment Hondo
Hondo's picture

Tell BAC to open their books and lets all take a deep dive.....they won't do that and the FED is culpable in hiding what is behind the door...........take her down unless they and all other banks come clean regardless of the FED's BS.

Tue, 08/23/2011 - 12:41 | Link to Comment buzzsaw99
buzzsaw99's picture

So if they are wrong and or lying does anyone go to jail? Hell no! Lie away maggots!

Tue, 08/23/2011 - 13:49 | Link to Comment bread n circuses
bread n circuses's picture

No one should go to jail for lying.  It's your fault if you believe them and/or don't do your own due diligence.  In an ideal scenario, they would lose credibility and no one would listen anymore. 

The real problem is that, because of the SEC and FDIC and laws and regulations and codes and legislators who hold meetings and hearings and a whole lot of "oversight" by the benevolent government who are the same people who are lying to you, a lot of people like yourself seem to think that people won't lie; after all, there are laws against that!!  So it creates a false sense of security and laziness.

Don't

Trust

Anyone.

Tue, 08/23/2011 - 14:57 | Link to Comment damnitalready
damnitalready's picture

Right.

We should have done our due diligence, and it's our own fault when Paulson said there would be tanks in the street if TARP didn't pass.

Oh, you didn't get to do due diligence, or no one listened to you when you did, yet you're still on the hook?  Too bad, take it out of Paulson's credibility.

Tue, 08/23/2011 - 15:25 | Link to Comment bread n circuses
bread n circuses's picture

If you're in the game and you're playing by someone else's rules that you don't like, you're still in the game.  You don't have to be.

 

Tue, 08/23/2011 - 12:41 | Link to Comment Bam_Man
Bam_Man's picture

Is that the same Henry Blodget - the convicted criminal who was barred for life from ever working on Wall St. again?

Tue, 08/23/2011 - 12:45 | Link to Comment NOTaREALmerican
NOTaREALmerican's picture

Isn't it implied that anybody working on Wall Street is a criminal.  

 

It's like the concrete joke:   There's two types of concrete (Banksters),  cracked concrete (criminal banksters) and concrete that's gonna crack (banksters that haven't been caught yet). 

Tue, 08/23/2011 - 12:46 | Link to Comment Confused
Confused's picture

Yes. But does that make his article (which relies upon the data of others) less than true?

 

I for one think Blodget is a hack. But lets be honest. BAC is shit. Pure and simple.

Tue, 08/23/2011 - 12:47 | Link to Comment JPM Hater001
JPM Hater001's picture

Being kicked off Wallstreet doesnt mean you lose the ability to make right calls about Wallstreeet.  Madoff was a crook but is oddly qualified to identify the US ponzi scheme...even from jail.

Tue, 08/23/2011 - 12:56 | Link to Comment tawdzilla
tawdzilla's picture

Yes, the same Blodget who was thrown under the bus by his ex-employer Merrill Lynch, which is now owned by BAC.  Isn't karma a biotch?

Tue, 08/23/2011 - 13:07 | Link to Comment zenbones
zenbones's picture

The truth is the truth no matter who says it.

Tue, 08/23/2011 - 13:07 | Link to Comment zenbones
zenbones's picture

The truth is the truth no matter who says it.

Tue, 08/23/2011 - 13:33 | Link to Comment BlackholeDivestment
BlackholeDivestment's picture

...nice, I like it. ...on par with The Truth is not a choice. http://bible.cc/1_corinthians/1-27.htm

Tue, 08/23/2011 - 13:31 | Link to Comment Central Wanker
Central Wanker's picture

Yep. He's one of the few unlucky ones who has been barred. The majority of the criminals are still working there.

Tue, 08/23/2011 - 12:42 | Link to Comment economessed
economessed's picture

Bankster of America -- YOU'RE UNDERCAPITALIZED.  Your CAMEL ratios are horrific.  Your leadership, management, and accounting practices are unethical.  Please remit another press statement refuting my claims within 6 hours.  Love, economessed.

Tue, 08/23/2011 - 12:45 | Link to Comment Flakmeister
Flakmeister's picture

You want one hump or two with that? 

Tue, 08/23/2011 - 13:08 | Link to Comment Crisismode
Crisismode's picture

And a camel toe.

Tue, 08/23/2011 - 12:45 | Link to Comment bg1234
bg1234's picture

 

 

 

Tue, 08/23/2011 - 12:43 | Link to Comment dbach
dbach's picture

Funny they don't say which way they are off by factors of 10 and 4.

Tue, 08/23/2011 - 12:43 | Link to Comment alexwest
alexwest's picture

####
or the mortgage analysis being provided by a hedge fund "that has acknowledged it will benefit if our stock price declines
###

cant believe idiots could write this way..

so let me get it straigt.. ANY ANALYSIS IS OKKKKKKKKKKK
AS LONG AS IT BENEFITS IF STOCK PRICE IS HIGHER...

did they mean that? arent they afraid of sec/lawsuits/etc?

fin world is compelety fucked and lost mind

alx

Tue, 08/23/2011 - 12:50 | Link to Comment squidward
squidward's picture

I can't believe that they would put this in because they are saying that a hedge fund has analysis so credible they are putting money behind it.   

Blodget doesn't even have that type of skin in the game

Tue, 08/23/2011 - 12:56 | Link to Comment toady
toady's picture

Afraid of the SEC? More like complicit with the SEC!

A class action though... That might be a good idea...

Tue, 08/23/2011 - 12:44 | Link to Comment buzzsaw99
buzzsaw99's picture

btw, if BAC is massively undervalued that means insiders won't sell squat. Right? Beuller? Beuller?

Tue, 08/23/2011 - 12:45 | Link to Comment RobotTrader
RobotTrader's picture

 

 

TLT barely moving.  People are still piling into bonds.

5-yr. still at 0.91%, which means if you want to earn $100,000/yr. "risk-free", then all you need to do is to pile $11,000,000 of fiatscos into 5-yr. AA-rated Uncle Gorilla notes.

Tue, 08/23/2011 - 12:49 | Link to Comment Cleverbot
Cleverbot's picture

No, I don't think it would. Why don't you tell me more about the Anunnuki?

Tue, 08/23/2011 - 13:01 | Link to Comment Pladizow
Pladizow's picture

They will return shortly for the gold they left behind for us to mine as slaves!

Tue, 08/23/2011 - 12:50 | Link to Comment Bam_Man
Bam_Man's picture

There is still a lot of short covering going on. When it is finally over watch out. The spike in yields at the long end will be sudden and spectacular.

A lot of people followed Taleb's and Gross' advice to short UST's and have been buried.

Tue, 08/23/2011 - 12:45 | Link to Comment Mongrel
Mongrel's picture

It's all fun and games until somebody gets an eye put out . . .

Tue, 08/23/2011 - 12:54 | Link to Comment Rylie
Rylie's picture

then it's a sport

Tue, 08/23/2011 - 13:00 | Link to Comment toady
toady's picture

Bloodsport

Tue, 08/23/2011 - 12:45 | Link to Comment Crumbles
Crumbles's picture

Perhaps Irene will make a huge withdrawal from the Outer Banks over the weekend.

http://www.ssd.noaa.gov/goes/flt/t2/flash-ft.html

 

Tue, 08/23/2011 - 14:17 | Link to Comment Shirley Wilfahrt
Shirley Wilfahrt's picture

I'd happily pay a pound of silver to see Irene grind up the DC/NYC corridor into a pile of shit....Katrina stylee....

 

 

Tue, 08/23/2011 - 12:46 | Link to Comment bill1102inf
bill1102inf's picture

Its a MASSIVE RALLY!!!!  KD begs GOD to flood DC

Tue, 08/23/2011 - 12:47 | Link to Comment Bohemian Clubber
Bohemian Clubber's picture

Now that DSK is out, careful for your gold!

Tue, 08/23/2011 - 12:49 | Link to Comment Darth Silver
Darth Silver's picture

SGS, your bears called this one.  way to go dude!

Tue, 08/23/2011 - 12:50 | Link to Comment lizzy36
lizzy36's picture

Just an FYI on the Rumor Mill. Emphasis on RUMOR.

JPM to take over either BAC or CFC with assistance from the government.

New entity to get $100B pref investment from the Geithner/government.

Now i am going to blow my personal gasket.

Looks like Dodd/Frank isn't worth the paper it is written on. Shocked at that really shocked.

Tue, 08/23/2011 - 12:57 | Link to Comment Seasmoke
Seasmoke's picture

that Jamie Dimon is good

Tue, 08/23/2011 - 12:55 | Link to Comment slaughterer
slaughterer's picture

JPM can't get BAC without violatng anti-trust laws.  

Tue, 08/23/2011 - 12:58 | Link to Comment TruthInSunshine
TruthInSunshine's picture

 

 

Laws are no longer relevant in Amerikranski.

Tue, 08/23/2011 - 13:22 | Link to Comment smore
smore's picture

Yeah, not for a very long time.

"Let me issue and control a Nation's money and I care not who makes its laws"

Rothschild, 1838

Tue, 08/23/2011 - 13:31 | Link to Comment NotApplicable
NotApplicable's picture

Only if you're TBTF.

Otherwise, bend over and spread 'em!

Tue, 08/23/2011 - 13:10 | Link to Comment zenbones
zenbones's picture

Ask Sandy Weill what can be done.

Tue, 08/23/2011 - 13:19 | Link to Comment --Freedom--
--Freedom--'s picture

The wsj article said they would have to sell assets later to come into compliance.
If this turns out to be true, what do people thing it will do to the financial sector stocks in general?

Tue, 08/23/2011 - 14:08 | Link to Comment NotApplicable
NotApplicable's picture

There will be fewer of them.

Eventually, there will be but one, to rule them all.

Tue, 08/23/2011 - 13:06 | Link to Comment oogs66
oogs66's picture

and the government will likely cap litigation risk...so the government will pay the people for the bankster fraud?  

Tue, 08/23/2011 - 15:09 | Link to Comment CompassionateFascist
CompassionateFascist's picture

I heard that TBTF bailouts are MANDATORY under D-F. Whatever.

Tue, 08/23/2011 - 12:52 | Link to Comment bill1102inf
bill1102inf's picture

Rebels just stole a gold plated ak47 from the Q compound... wonder if he knows how much that thing is worth

Tue, 08/23/2011 - 12:53 | Link to Comment Ben Probanke
Ben Probanke's picture

A Florida man was charged on Tuesday in connection with plans to set off a large stash of

fireworks on the National Mall in Washington, D.C., apparently to protest U.S. banking industry

policies, .

 

    Bond was set at $2 million, according to WTTG.

 

  National Park police said they arrested Neff, of Stuart, Fla., after they saw him in a red

Jeep Cherokee in a park in the Washington suburb of Bethesda, Md., after closing time Monday.

The Jeep contained fireworks and was fitted with a turret and multiple tubes from which the

explosives were to be deployed, police said.

 

  Neff told police he didn't want to hurt anyone, but wanted to draw public attention on the

busy National Mall. He said he wanted to send a message about the banking industry, police said.

Tue, 08/23/2011 - 14:22 | Link to Comment Shirley Wilfahrt
Shirley Wilfahrt's picture

Pfffttt....fucking amateur....

 

 

Tue, 08/23/2011 - 12:54 | Link to Comment Surly Bear
Surly Bear's picture

What is the CDS spread? That will tell me everything I need to know....

Tue, 08/23/2011 - 12:54 | Link to Comment monopoly
monopoly's picture

Gold down and Robot is back.

Yeah, missed the old guy and his prophetic posts. Where were you the last 300 dollar ramp in gold? Oh well, nice to have you back Robot.

Tue, 08/23/2011 - 14:02 | Link to Comment ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

Robot isn't about "responding" to other people's posts.

Tue, 08/23/2011 - 12:54 | Link to Comment Seasmoke
Seasmoke's picture

just based on how they lied, stalled, bumbled and have no clue what they are doing with a simple modification (BOA can factor that by a few million) and the rest of us should fully understand why this bank is insolvent

Tue, 08/23/2011 - 12:55 | Link to Comment hambone
hambone's picture

PANIC BUYING COMMENCE!!!! 

Tue, 08/23/2011 - 12:55 | Link to Comment Sequitur
Sequitur's picture

Disgusting, more taxpayer money to backstop these reckless fuckers. When the fuck does this shit end.

Tue, 08/23/2011 - 13:29 | Link to Comment j0nx
j0nx's picture

I could answer your question but you already know the answer to it just as the rest of us already know. It also amazes me how we never have any money for NASA or education or jobs programs or infrastructure upgrades but somehow we always seem to be able to find a few hundred billion laying around in the seat cushions to bail out the TBTFs...

Tue, 08/23/2011 - 12:57 | Link to Comment pamriallc
pamriallc's picture

Guys like Henry are fun like the same guys (Cramer) on the other side.  At least Cramer tells you that he really is there to entertain you.  Blodget was incredible at puffery, and now that he has found mainstrem media, and is "expempt" from the SEC after being permanently banned...  he can be as blasphemous as he wants to be.

Truth be told, companies like Coca Cola have virtally ZERO tangible equity and yet still earn tons of cash.  That's the case with Bank of America as well.  Tangible equity is not necessarily all that it's cracked up to be if the firm in quesiton has tons of recurring cash flows.  24 months from now, the company will stil charge off $20+ billion a year in losses but the cash flows will be triple that number.

I suspect you iwll see the FED capitulate in RELAXING the current capital standards and claiming the beginning of a recovery and furthermore, the relaxing of capital ratiostandards in order to accelerate lending.

11% of the deposit base in America will not go to ZERO.  Sorry guys.  The system will not allow it.  Buy the TARP preferred and the Convertibles if you can't stomach the common equity.

Tue, 08/23/2011 - 12:59 | Link to Comment carbonmutant
carbonmutant's picture

Hmmm....

Tue, 08/23/2011 - 13:02 | Link to Comment slaughterer
slaughterer's picture

You work in Charlotte?

Tue, 08/23/2011 - 13:45 | Link to Comment Bam_Man
Bam_Man's picture

The reason banks need tangible equity is that in "bad times" their cash flow is woefully insufficient to cover write-offs and write-downs.

That is B of A's problem right now - in spades.

Tue, 08/23/2011 - 12:56 | Link to Comment slackrabbit
slackrabbit's picture

Delivery boy: Hello I have a large delivery of new underwear and toilet paper for someone...ummm L Dirita, El Dorado, El Diarea?

Tue, 08/23/2011 - 12:56 | Link to Comment TradingJoe
TradingJoe's picture

Well what can I say, if you are not shorting this "rally", suit yourself! All I see is fear and greed, fear and greed, no one, really, no one, is actually THINKING for a change!

Tue, 08/23/2011 - 13:06 | Link to Comment Traianus Augustus
Traianus Augustus's picture

Be careful there Joe. Earlier rumor today was the that the US was going to implement their own ban on Financial stocks very soon.  This is sooo stupid it has got to be true!!!

Tue, 08/23/2011 - 13:14 | Link to Comment TradingJoe
TradingJoe's picture

Traianus, on Friday I'll know weather my grandparents raised an idiot ora lucky fool :)))!

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