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Bank Of America Scrambles To Defend Itself From Henry Blodget's Allegations It Is Massively Undercapitalized
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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I for one, would love to see financial stocks banned.
It ends when the system blows up and we have a true "funding crisis" and not before. But it will end... new.
Sung to the tune of "America" by Neil Diamond:
The Bank of America
TARP
Received billions in TARP
We take your homes
You sleep in your cars
Free
We'll get off scot-free
Lawyers huddle close
and pay off the AG's
Own the Prez and now your place
We're Bank of America
Stealing homes at record pace
We're Bank of America
Homes, dump them back on Fannie Mae
We robo-sign and that's okay
In the eyes of the courts
In the eyes of the courts
Loans, what we hold is toxic waste
but Mark-to-Model is our case
Makes shareholders feel warm
Makes shareholders feel warm
Accounting from the netherworld
We're Bank of America
Our real books would make you hurl
We're Bank of America
Gotta scheme not fair or square
We're Bank of America
Turn your dreams into nightmares
We're Bank of America
We're Bank of America
We're Bank of America
We're Bank of America
We're Bank of America
You pay! But can't stay!
My country disses me
Today!
Where's justice and liberty?
Today!
To justice we do cling
Today!
Pitchforks we bring
Today!
For me, too early to short, to much of a gamble when the head inmate will spill saliva on his beard as he advises the planet on Friday. No shorts.
Dealbreaker:
Dick Bové: Short All The Shares Of BAC You Can Borrow But It Won’t Do Any Good
Dick works in Charlotte too?
Nah, Stamford
Now? Don't you ever look at price charts. that would be a good way to go broke. It works like this; it already went down, so now it goes up. Whereas, if it had gone up a long ways for a significant time, then you could short it. You don't short bottoms, for christ sake.
I think you missed the sarcasm. All the Bovester was claiming is that a falling stock price doesn't affect BAC because it's cash rich, not recommending investors seeking a gain should short BAC.
From the link:
Does no one know how to “break a bank”? Must he hold your hand through everything?
It looks like their stock is recovering a little from this morning's lows. Maybe they aren't as bad as everyone is saying.
I can't wait for BofA to fail. And then we can print up all of our 0hedge reports and send them out snailmail and fax gratis to all newly out of work BofA Assholes!
there are plenty of good people at BOA that I will be sad to see without jobs. Watch you wish for on others because it will come back to you
There are also "plenty" of very, very, very bad people at BAC who will do anything, even destroy their own country, to preserve their jobs.
if you're not of work now, then you will be if they blow.
Wrong - the sooner this crap blows the better for all of us.
"Big man, pig man, ha ha CHAARAADE YOU ARE!" as Pink Floyd would say.
BAC stock not flying high after this press release? Shocking.
OUCH! Shrapnel in the butt for BAC.
When the smoke clears from BAC, people will be dumpster diving GS, JPM, and CITI. Curious people want to know. There is a growing credibility gap with all the banks.
Banks die the same way people do - denial, anger, bargaining, acceptance. I suggest BAC is getting to the third step. Well Brian, it looks like you'll be seeing some folks in court all right - you just won't be sitting at the plaintiff's table.
Except that people leave a rotting corpse as evidence, while toxic bank assets just discounted to zero over time in a series of sweet-heart deals with gov subsidies.
Henry's old firm was Oppenheimer. He was hired by Merrill because their own analyst wouldn't print the $600.00 price target reports on Amazon. Henry's "truth telling" rally-cry is the rally-in-reverse puffery. Hardly credible. Jumping on yet another bandwagon trying to make a few bucks for a few months. Snake oil then.....snake oil now.....
We like Henry
sordid past and all
Hello, Ad Hominen Maximus.
When you don't want the facts to get out, keep trying to distract everyone by attacking the messenger, bitch!
thats great and all but the market doesnt care
and when bac is resolved and in the rear view mirror it will give the market an excuse to go higher
Hello Brighter Minds. Tangential but urgent question:
Due to circumstances beyond my control, we're closing on a house Monday. Bank of America is the entity I'm supposed to wire the nest egg to for a downpayment.
Is there any way their problems could mess up my closing? Any risk in wiring Friday? Deeply appreciate any insight. Payback in positive karma will be substantial. Got a family to protect.
Why not reschedule the closing for 8/30? That way you know if they make it to Tuesday and still give yourself another 24-hours until 8/31 if something normal pops up at closing. The main thing (from an interest point of view) is to close just prior to the end of the month. 8/29 is not necessary. 8/30 is good.
Am I wrong anyone?
Book-talkers accusing other book-talkers of talking their book.
Mr. Kettle! Paging Mr. Kettle to the white courtesty phone! It's a Mr. Pot.
BTW, just on the CNN ticker, I saw FED TO UNLEASH QE3... for a few seconds...
subliminal messaging, buy the ramp!
Bank of Scamerica's statements are almost as credible as those coming from the insolvent Greece.
08-23 13:01: Greek finance minister expects economic growth next year
is that like "Free Beer Tomorrow" ?
Henry fires back: http://www.businessinsider.com/bank-of-america-henry-blodget-2011-8
FIGHT CLUB, OMG LOL. GRRR HIT EM IN THE ANTENNA, THEY'RE USELESS WITHOUT IT!!
... and our stock price is off by a factor of ten since Mr. Blodgett published "The Wall Street Self-defense Manual: A Consumer's Guide to Intelligent Investing"
We are seeking a resolution to this matter.
They defended their goodwill? How about you defend that BNY Mellon settlement price for countrywide.
I DON'T KNOW WHY EVERYONE IS SO SCARED HERE. DIDN'T ANYONE LEARN ANYTHING? HERE ARE THE THREE OPTIONS FOR BAC.
1. RAISE CAPITAL THROUGH EQUITY MARKETS DILUTING EXISTING SHAREHOLDERS
2. RAISE PRIVATE PLACEMENT INCLUDING THE FEDERAL GOVERNMENT BUYING UP TO 50% OF BAC AT A PRE-ESTABLISHED PRICE YET TO BE DETERMINED
3. LET IT BECOME A CRISES AND GIVE IT FOR A SMALL AMOUNT TO JPM OR WFC WITH THE GOVERNMENT TAKING LIABILITY FOR ALL THE CRAP.
THATS IT. NO WAY IN HELL THEY WILL LET BAC JUST FAIL. THAT WOULD BE INSANE AT THIS STAGE OF THE GAME TO BAIL THE WHOLE WORLD OUT AND BECAUSE RON PAUL DOESN'T LIKE YOU AND WE DON'T LIKE YOU YOU SUDDENLY CHANGE YOUR GAME PLAN AND LET EVERYTHING GO TO HELL.
Simmah down, now!
Zeroman, spot on with No.3.
Last week or so received a new BAC credit card while my current one expired 04/2014.
Completely new account number assigned with same expiration date 04/2014; seems the IT systems are in place for JPM and /or WFC to takeover portions of BAC.
You're correct Gov will back stop this, minimize foreclosure suit payouts, and absorb the toxic assets in the shadow land.
Good Job!
Twice a Day
All going to JPM with about a zillion in gubbermint help, I hear.
Sock Puppet Operation 4.xx has infiltrated Zero Hedge.
There are Sock Puppets everywhere.
You can easily detect them due to the fact that their IQs can't possibly be more than 82, so they're probably making about $200,000 a year with retirement at 50 (full pension, the works).
I am doing my part to help them. They can have my $3.27 that I left over there.
You should write a check for $3.26.
You should write 326 checks for a penny.
:)
Would a banker really lie to us?
I have zero sympathy for BOA. They catered to the illegals in the Charlotte area giving them mortgages and credit cards.
Something to consider. The Democrat Convention is coming to Charlotte. I can't see Obama and the Dems coming here with the Charlotte economy completely tanked due to BOA going under. There'd be too many people out of work with nothing better to do than protest.
Amerikka! Fuck Yeah!!
Hmmmm:
-By David Benoit, Dow Jones Newswires; 212-416-2458, david.benoit@dowjones.com
I'm still convinced Bank of America is nothing more than the toxic waste dump for the real banksters.
The person that wrote that probably has already been killed off.
In fact, its clear that the PR hack behind that was indeed a double agent plant that was given the task of making BOA look as dumb as possible, thus, adding fuel to the already growing bon fire of epic and unimaginable proprotions.
Right, that's why you're trading at less than half that and people are still selling.
"The sovereign exposure is off by a factor of 10. The commercial real estate figures are off by a factor of four. "
Which direction was he off?
Not for nothin', but Henry Blodget?1? Who gives a flyin' fuck what he thinks with his resume. Didn't even get the numbers right in his analysis. BAC might be hiding the extent of its loss content, the guy was a bullish internet analyst valuing companies based on eyeballs and viewership before the collapse.
Any time any corporation is as frantic as Bank of America - literally trashing blog posts - that is a very, very bad sign for them.
Maybe we should ban short selling of BAC? Hahaha.
At what stock price does Dodd-Frank kick in and the Feds step in with the bailout. This is exactly why Dodd-Frank was written, right? Maybe we'll get to see in action what a joke the law was. Which will go first, ObamaCare or Dodd-Frank?