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Presenting The Key Questions To Be Answered By Bank Of America In Today's Fairholme Capital Conference Call

Tyler Durden's picture


Ahead of today's Bank of America conference call organized by Fairholme's Bruce Berkowitz which has one purpose only: to rescue his losing investment in Bank of America, which is down almost 30% in the past week, below, courtesy of Manal Mehta, we present 6 prepared questions which we are confident will all get their due attention by Mr. Berkowitz because unless these core questions, which go to the heart of all investors fears about Bank of America, are not answered, and instead nothing but fluff is discussed, the whole exercise will lead to an even greater panic in Bank of America stock. And what would be more ironic than another 20% drop in the BAC stock during this call. Also, in addition to the questions below, we post the following, based on an analysis by Compass Point Research & Trading, which matches an analysis conducted independently by Zero Hedge, and according to which BofA could be forced to repurchase between $28.4 and $62.2 billion, or between $10.6 and $44.4 billion above the bank's current reserves, which would immediately impair the firm's Tier 1 Capital, trimming it by more than 50%, and forcing the company to immediately issue an equity follow on, which will likely lead to a stock price also about 50% lower.

Per Compass: "The bank could be on the hook for as much as $14.8 billion in future losses from U.S. government-back investors Fannie Mae and Freddie Mac, the report said. The losses would come despite a January settlement agreement totaling $2.8 billion that resolved most of the outstanding repurchase claims between Fannie Mae, Freddie Mac and BofA. Compass Point also said the bank could report as much as $44.1 billion in total losses from repurchase requests from private investors. BofA could also lose up to $3.3 billion to monoline insurers looking to recoup losses on mortgage bonds they insured."

As for the questions which we believe are instrumental to getting a fair sense of what is happening with Bank of America, here are the 6 main questions which Moynihan should response before anything else.

We urge readers to dial into this call to hear the honest answers (or lies as the case may be) straight from the horse's mouth - link for the webcast is here.

Questions for Bank of America's CEO:

  1. Earlier this year, you reached an agreement to settle rep + warranty claims tied to a monoline insurer – Assured Guaranty.  Wrapped RMBS deals were typically rotated amongst all the monolines so rep + warranties given to Assured were substantially similar to those provided to MBIA and others.  Yet, in your financial statements – from your latest 10-Q for Q2 2011, you state “We have had limited experience with the monoline insurers, other than Assured Guaranty, in the repurchase process as each of these monoline insurers has instituted litigation against legacy Countrywide and/or Bank of America, which limits our ability to enter into constructive dialogue with these monolines to resolve the open claims. It is not possible at this time to reasonably estimate probable future repurchase obligations with respect to those monolines with whom we have limited repurchase experience and, therefore, no representations and warranties liability has been recorded in connection with these monolines” How is it reasonable – when you have settled with Assured, how is it possible to make a statement that you don’t have enough experience to set aside reserves for claims from monolines like MBIA?  The deals were the same.  To ask a very blunt question – Has Bank of America set aside any reserves for your ongoing litigation with MBIA where you have lost a number of key court rulings?  What would you say to those who say you are hiding behind accounting rules about litigation to not set aside adequate reserves?
  2. The precedents set in litigation versus MBIA has emboldened others to pursue litigation against BAC.  These rulings include allegations of a de facto merger opening BAC to successor liability as well as the use of statistical sampling rather than “hand to hand combat” in fighting mortgage putbacks.  As you highlight in the latest 10-Q, “Additionally, if recent court rulings related to monoline litigation, including one related to us, that have allowed sampling of loan files instead of a loan-by-loan review to determine if a representations and warranties breach has occurred are followed generally by the courts, private-label securitization investors may view litigation as a more attractive alternative as compared to a loan-by-loan review.”  In two weeks, there will be another important decision in the case which relates to an assumption you highlight in your latest 10-Q.  For example, if courts were to disagree with our interpretation that the underlying agreements require a claimant to prove that the representations and warranties breach was the cause of the loss, it could significantly impact this estimated range of possible loss. Isn’t it time to reach a settlement with MBIA before there are further damaging court rulings?
  3. In a December 2010, NY Times article you stated, “But what about Countrywide?   “A decision was made; I wasn’t running the company,” Mr. Moynihan says, although he was obviously a top bank official at the time. “Our company bought it and we’ll stand up; we’ll clean it up.””  In a February 2008 interview, Bank of America spokesperson Scott Silvestri said: Nevertheless, the banking giant says that Countrywide's legal expenses were not overlooked during negotiations. "We bought the company and all of its assets and liabilities," spokesman Scott Silvestri says. "We are aware of the claims and potential claims against the company and have factored these into the purchase."” However, as justification for the BNY deal, the trustee, Bank of New York states “More specifically, before entering into the Settlement, the Trustee has taken into account, among other things, the following: Countrywide’s position that the Trustee could not impose liability on Bank of America under theories of successor liability, veil piercing, or de facto merger is reasonable.” In a number of monoline litigation suits such as MBIA versus Countrywide/Bank of America, the judge has refused to dismiss Bank of America as a defendant claiming that there’s sufficient evidence to support allegations of a de facto merger.  How is it reasonable for BNY to support the settlement under an assumption which runs counter to rulings in a majority of putback lawsuits so far?  
  4. Cost of foreclosure delays.   GSE executives testified that each day a foreclosure is delayed costs approximately $30-$40 per day per loan file.  The GSE’s subsequently required that Bank of America reimburse them for the cost of foreclosure delays.  Initially you estimated the cost of foreclosure delays to be tens of millions of dollars, then it became hundreds of millions and in the latest 10-Q that number had grown to one billion.  In the Q-1 Form 10-Q, you state “Many non-agency residential MBS and whole-loan servicing agreements require the servicer to indemnify the trustee or other investor for or against failures by the servicer to perform its servicing obligations or acts or omissions that involve willful malfeasance, bad faith or gross negligence in the performance of, or reckless disregard of, the servicer's duties.” What reserves has Bank of America set aside to reimburse non agency RMBS securitization trusts for the cost of foreclosure delays?  If BAC engaged in conduct such as robo-signing that led to foreclosure delays, why should investors in RMBS trusts not be reimbursed?  If so, what is the reserve that BAC has set aside for that?
  5. Repurchase Rate Assumption.  In your 10-Q, you state that “The BNY Mellon Settlement led to the determination that we now have sufficient experience to record a liability related to our exposure on certain other private-label securitizations. This determination, combined with changes in our experience with the behavior of certain counterparties, including the GSEs, in the first six months of 2011, was the driver of this additional provision. A significant factor in the estimate of the liability for losses is the repurchase rate, which increased in both the three and six months ended June 30, 2011.” Your 10-Q sheds very little light on how BAC arrives at the repurchase rate assumption and whether or not non-related parties would find those assumptions reasonable?   Also, if the BNY settlement leads you to have sufficient experience to record a liability, why would the Assured settlement not have the same effect for other monolines?
  6. New York Attorney General Eric Shneiderman filed to intervene in the BNY Mellon Settlement claiming “Countrywide's failure to transfer complete mortgage loan documentation to the trusts hampered the ability of the trusts to foreclose on delinquent mortgages” If his allegations turn out to be true, does that mean securitization trusts which were collateralized by mortgages are effectively unsecured obligations?  Does that mean investors in those RMBS trusts would be allowed to put back the securities to Bank of America?

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Wed, 08/10/2011 - 12:50 | 1547052 Mr Lennon Hendrix
Mr Lennon Hendrix's picture
The Key Questions To Be Answered By Bank Of America In Today's Conference Call-

When will our stock price be at zero?

Wed, 08/10/2011 - 13:03 | 1547132 bigdumbnugly
bigdumbnugly's picture


umm, well i haven't checked the ticker in the last few minutes but...

Wed, 08/10/2011 - 13:20 | 1547207 gmrpeabody
gmrpeabody's picture



Wed, 08/10/2011 - 13:27 | 1547241 gmrpeabody
gmrpeabody's picture

Watching the CNBC talking heads  screaming for JPM's Dimon to run for president after he's moving speech (NOT) today on what's wrong and right with America.

It was enough to choke a maggot.

Thu, 08/11/2011 - 02:08 | 1549944 FIAT_FixItAgainTony
FIAT_FixItAgainTony's picture

i hate maggots that choke, must be the reason my tee vee's been off and unplugged all of this year. 

you are brave for attempting to watch MSM.  i comprehend the need to see the spin offered to the sheeple, but i've found i do quite well completely avoiding it.

thanks tyler and zh'ers for being here.

Wed, 08/10/2011 - 13:16 | 1547186 quintago
quintago's picture

If BOA has to repurchase, guess what, so do the taxpayers because of the liability they absorbed on the WaMu purchase which will undoubtedly be attacked next, along with every other Shady McShadyville lender's loans which were repackaged and sold to idiots.

Wed, 08/10/2011 - 12:48 | 1547056 moneymutt
moneymutt's picture

Also, can we have our TARP and all the other money FED gave you back, and you go away....

Wed, 08/10/2011 - 12:51 | 1547069 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

You can't have your TARP and eat it too.

Wed, 08/10/2011 - 13:02 | 1547124 Sancho Ponzi
Sancho Ponzi's picture

And what's this about Fannie Mae, the GSE that should have died but is now being subsidized by taxpayers, buying BAC mortgages? You've got to be kidding, right? Whoever made that decision needs to be fired NOW.

Wed, 08/10/2011 - 13:12 | 1547169 Drag Racer
Wed, 08/10/2011 - 13:24 | 1547226 Sancho Ponzi
Sancho Ponzi's picture

You can't just rent houses that have been vacant for years without spending thousands of dollars on repairs and maintenance. Hell, many of those subprime houses should be torn down. This administration is totally freaking clueless.

Wed, 08/10/2011 - 13:41 | 1547250 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Soon, to go along with foodstamps, there will be rent stamps.

BAC in the USSA!

Wed, 08/10/2011 - 13:45 | 1547318 Rodent Freikorps
Rodent Freikorps's picture

If they were just clueless, wouldn't they -- at least occasionally -- do something that didn't harm the country?

Wed, 08/10/2011 - 13:53 | 1547353 Ricky Bobby
Ricky Bobby's picture


Makes you wonder - so much easier to destroy then to build.

Wed, 08/10/2011 - 14:30 | 1547486 A Lunatic
A Lunatic's picture

Shovel ready, bitchez.

Wed, 08/10/2011 - 14:34 | 1547501 Rodent Freikorps
Rodent Freikorps's picture

All this news has made me nervous.

So...I went to Ebay and loaded up on some more powdered eggs and tactical bacon.

Other than that kind of stuff, I'm good whichever way things go. If someone could figure out how to do freeze dried Pepsi, they become a billionaire.

Wed, 08/10/2011 - 20:13 | 1549197 StychoKiller
StychoKiller's picture

Ever hear of "Fizzies™?"

Wed, 08/10/2011 - 13:58 | 1547374 karzai_luver
karzai_luver's picture

Many of these sub primes have been bought for next to nothing and are now being flipped so if you are quick and smart it's easy money.


If you want jobs fixing them up or knocking them down is the question.


Well fixing them up provided easy money for more than knocking down so thats what you will get.

Nothing cluelss if you are in the system.


Wed, 08/10/2011 - 14:24 | 1547459 Drag Racer
Drag Racer's picture

McGraw-Hill is the owner of S & P, you know the downgrade guys, and this company, you know the ones with the construction job search network.

Wed, 08/10/2011 - 13:14 | 1547178 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

If we were to start blaming people the list would take up a few pages or so.

Wed, 08/10/2011 - 13:55 | 1547362 karzai_luver
karzai_luver's picture

They bought the service rights is the way i read it.


But yeah fire em all you will get enough someday.



Wed, 08/10/2011 - 13:07 | 1547148 mt paul
mt paul's picture

funnie 101

Wed, 08/10/2011 - 13:09 | 1547159 Sudden Debt
Sudden Debt's picture



Wed, 08/10/2011 - 14:39 | 1547526 gangland
gangland's picture

which would you take? pesos or pesetas?


Wed, 08/10/2011 - 12:51 | 1547072 slaughterer
slaughterer's picture

Mr. Lennon hendrix


to the point! 

Wed, 08/10/2011 - 12:52 | 1547073 Dr. Engali
Dr. Engali's picture

How much are you going to sell  Merrill to JP Morgan for?

Wed, 08/10/2011 - 12:52 | 1547076 Ancona
Ancona's picture

It's coming at them from all sides now. I think it is just a matter of a few days before we hear about some kind of restructuring or another.

Wed, 08/10/2011 - 12:54 | 1547077 Spitzer
Spitzer's picture

Who cares about the forensics. Anyone (Paulson) that was too dumb to realize that these banks where finished in 08 needs their head examined.

Funny how Maradith Whitney got famous for doing some forensics on Citi, Fanny and freddie, yet Peter Schiff predicted those bankruptcies in 2006.

Wed, 08/10/2011 - 13:18 | 1547195 Alea Iactaest
Alea Iactaest's picture

Being right but getting the timing wrong is still wrong.

Wed, 08/10/2011 - 12:52 | 1547078 ShankyS
ShankyS's picture

How bout the backdoor countrywide bailout we're gonna pay for? 

Wed, 08/10/2011 - 12:52 | 1547080 phungus_mungus
phungus_mungus's picture

Since the BOA, Fannie Mae, Freddie Mac trifecta of realestate timebombs is unspooling. Do you think we'll stop seeing those silly stories about the bottom of the hosuing market, rebounds and green shoots?


Yeah, me neither...  

Wed, 08/10/2011 - 12:53 | 1547082 Jim in MN
Wed, 08/10/2011 - 12:54 | 1547086 heatbarrier
heatbarrier's picture

What about AIG claiming :::cough::cough::: "fraud"?   

...Ah, we can't comment on ongoing litigation.  (thinking "speeding ticked at the Indy500")


Wed, 08/10/2011 - 12:54 | 1547088 Misean
Misean's picture

Here's the menu. Remember, this is your last meal, make it a good one.

Wed, 08/10/2011 - 12:55 | 1547091 Long-John-Silver
Long-John-Silver's picture

I know what will be said.


We are Lehman Brothers. We are dead.

Wed, 08/10/2011 - 12:55 | 1547093 Eally Ucked
Eally Ucked's picture

What is notional value of SIV, what is market price for it if any?

Wed, 08/10/2011 - 12:57 | 1547099 Misean
Misean's picture

The value is whatever we say it is, so sayeth FASB, so shall it be. How dare you question the gods!

Wed, 08/10/2011 - 12:56 | 1547095 citta vritti
citta vritti's picture

what about REMIC status for RMBSes where loan docs. weren’t sent to the trustee on time?

Wed, 08/10/2011 - 12:59 | 1547112 Misean
Misean's picture

The REALLY big boys who bought these things are figuring out what to do. Once they move, the IRS will swoop in and maul a few medium sized investors for taxes, and collapse the mess.

Wed, 08/10/2011 - 12:58 | 1547103 firstdivision
firstdivision's picture

Is this a glimpse of what will be occurring at Paulson & Co after the BAC call?

Wed, 08/10/2011 - 13:54 | 1547356 Bob
Bob's picture

Like a glass of fresh glacial water!  Thanks, I needed that. 

Wed, 08/10/2011 - 12:58 | 1547104 Greater Fool
Greater Fool's picture

Some interesting non-questions there. They clearly convey the idea that BAC is only a few denied motions away from bankruptcy. 

Wed, 08/10/2011 - 12:58 | 1547107 pan
pan's picture

Counterparty risk = anti-money....bitchez!

Wed, 08/10/2011 - 12:58 | 1547108 Seasmoke
Seasmoke's picture

1. What really happened between Ken Lewis and Hank Paulson ?

2. Why did you not include who the real investor of the mortgage loan was (and where the money came from) at origination ?

3. Why have you used robosigning MERS (and others) to break all rules of property laws in the chain of assignments by using fraudulent signatures

4. What is the Mark to Market on your HELOCS ?

5. Why would anyone ever pay a mortgage that is serviced (not owned) by Bank of America ?

Wed, 08/10/2011 - 13:23 | 1547223 franzpick
franzpick's picture

6. How many residential and other properties are in default, what % are still being used by "stay-ins", and what % of the total have not been auctioned or sold?

Wed, 08/10/2011 - 12:59 | 1547113 economessed
economessed's picture

Looking back 80 years or so, we had the Bank of the United States blow-up.  Today it's Bank of America.  That rhyming sound you're hearing is history delivering the same lesson to those who are doomed to repeat it.

Wed, 08/10/2011 - 13:10 | 1547160 fyrebird
fyrebird's picture


Wed, 08/10/2011 - 12:59 | 1547114 Winosawrus
Winosawrus's picture

Is that the sound of a run on your bank in the background??

Wed, 08/10/2011 - 13:02 | 1547116 Camtender
Camtender's picture

Did Ken Lewis ever admit that Paulson had a gun to his head over Countrywide? I thought there was a video of this on youtube................

Wed, 08/10/2011 - 13:00 | 1547117 Victor Berry
Victor Berry's picture

Do you think Angelo Mozilo, John Thain, Stan O'Neal, Ken Lewis, et al, are all kicking back in their 24-kt gold lounge chairs enjoying the BAC shit storm show?  I'm sure their personal chefs and butlers are busy bringing them the finest popcorn money can buy!

Wed, 08/10/2011 - 13:08 | 1547129 slewie the pi-rat
slewie the pi-rat's picture


don't ask them what they "sold" to Fannie & Freddie and how much they received for it, in the last 24 hours, before this bullshit call, ok?

i repeat, do NOT ask them what the hell they are up to, NOW.  make sure you only talk about the stuff you rehearsed, ok?   L0L!

Wed, 08/10/2011 - 14:25 | 1547464 karzai_luver
karzai_luver's picture

doesn't matter ----------one pocket or the other. doesn't matter.


Wed, 08/10/2011 - 13:05 | 1547140 automato
automato's picture

The gold and silver bullion website has gone bonkers! Prices have gone out of control!

Wed, 08/10/2011 - 13:11 | 1547164 mt paul
mt paul's picture



80 $ for a basic oz of silver

520.$ for a ten oz piece....


long silver

nov 2008

Wed, 08/10/2011 - 13:06 | 1547143 mt paul
mt paul's picture

if BAC

was a seal


i'd eat two of them....

Wed, 08/10/2011 - 13:06 | 1547145 markar
markar's picture

way past time to flush this turd of a bank down the toilet

Wed, 08/10/2011 - 13:30 | 1547255 slackrabbit
slackrabbit's picture

Plumber: Its blocked sir. Im my 20 years of plumbing I've never seent turd so big. 

What was its name again, Moynihan?

Man this is weird, there all these big turds blocking up everyones pipes at the moment. But every time I ask congress if I can sort them out, they keep saying they smell sweet.

Wed, 08/10/2011 - 13:06 | 1547146 chunga
chunga's picture

Regarding question # 4, specifically "Robo-Signing".

This would be a great Powerpoint presentation to put those fears to

The Art & Science of Robosigning in the Post Scandal Era (New & Improved Document Fabrication)

Big h/t to Lisa at Foreclosure Hamlet. She's done more discovery on this crap than all our "regulatory" bodies combined.

"Finance is the art of passing money from hand to hand until it finally disappears."

- Robert W. Sarnoff -

Thu, 08/11/2011 - 02:17 | 1549949 FIAT_FixItAgainTony
FIAT_FixItAgainTony's picture

it depends on the court, but ANY mention of robo-signing or securitization is admitting there was a note and therefore a big no-no in court.  stick to there is no note because there aren't any.

Wed, 08/10/2011 - 13:16 | 1547176 hedgeless_horseman
hedgeless_horseman's picture

...unless these core questions, which go to the heart of all investors fears about Bank of America, are not answered, and instead nothing but fluff is discussed, the whole exercise will lead to an even greater panic in Bank of America stock.

Muddy Waters comes to America.

Wed, 08/10/2011 - 13:17 | 1547193 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

From sea to shining sea!

Wed, 08/10/2011 - 13:22 | 1547189 bob_dabolina
bob_dabolina's picture

SOCGEN has 100 billion in liquid assets......mmmhhmmm

...will be funding BOA's upcoming equity offering

The tide is going out again. There are massive interbank problems occuring. 

You don't need Bank CEO's coming out in the media saying everything is fine if everything is fine (they wouldn't need to). It's crisis management, and there is a crisis.

Old ZH video Tyler Durden used to post

Wed, 08/10/2011 - 13:22 | 1547218 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

It's BAC, Bob. Use it while it is still around to use.

Wed, 08/10/2011 - 13:38 | 1547232 bob_dabolina
bob_dabolina's picture

Sorry buddy, typo. 

(over 5,500 people so far on BAC conference call)

Wed, 08/10/2011 - 13:18 | 1547198 Pain Train
Pain Train's picture

SO, I've got both savings and checking with B of A, and was thinking about pulling cash out today. Thoughts?

Wed, 08/10/2011 - 13:22 | 1547220 chunga
chunga's picture


Wed, 08/10/2011 - 13:22 | 1547221 papaswamp
papaswamp's picture

I'm doing it tomorrow. Takes a while to line up closing 8 accounts. Had to have a place for it to go other than the shoebox. Asking for everything in cash might make their eyes bug out....I'm tempted.

Wed, 08/10/2011 - 14:27 | 1547471 CompassionateFascist
CompassionateFascist's picture

Don't "panic". Just kill the Beast. Now. I did my bit over the weekend.

Wed, 08/10/2011 - 13:24 | 1547224 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

You are insured for something like $350,000, but then I have to ask, if you have that much, why have you not used that cash to buy gold/silver/platinum?

Wed, 08/10/2011 - 13:55 | 1547360 papaswamp
papaswamp's picture

Already have enough...though I wouldn't buy Platinum. Most people have no idea what platinum is much less it's worth...and gold has surpassed it in value. 

Wed, 08/10/2011 - 13:43 | 1547307 j0nx
j0nx's picture

WTF does anyone still use this turd for deposits?? You should have pulled your equity accounts years ago in protest alone. I use them for my credit card to buy staples and supplies because I know they will fold and I aint paying any of that shit back when they come crashing down. Or I'll pay the new company back the same percentage of the debt that they bought it for from BAC. In other words pennies on the dollar. I flat out fucking REFUSE to pay 100 cents on the dollar for my debt when they will most likely pay 10c on the dollar at best for it themselves. That should be loan sharking imo.

Thu, 08/11/2011 - 02:20 | 1549952 FIAT_FixItAgainTony
FIAT_FixItAgainTony's picture

i killed every bank account last year.  no need for these scammers and crooks in my financial world. 

yes, getting a money order for every damn payment is a pain, but i feel better knowing there is not one bank who can screw me over now!

Wed, 08/10/2011 - 13:22 | 1547215 gangland
gangland's picture


BAC conference call, so far, just brian making a statement, no questions yet :

increased focus, lower risk, cut expenses


* not selling core assets to provide full range of services globally to all cutomers

* earnings are coming from core assets

* sell instead non-core assets

* focus is on cost-management (closed 63 bank branches on way to closing 750 branches)

* core expenses are flat but that is not enough, producing significant material and substantial cost savings more in q3 reort

* Q2 earnings 33 per share ex 90/share mortgage charge

* made money in credit card business which was aided by reserve releases.

*loan growth weak

*margins under pressure



Wed, 08/10/2011 - 13:27 | 1547242 citta vritti
citta vritti's picture

many thanks - look forward to more (the Thomson webcast thingy not working on my ‘puter)

Wed, 08/10/2011 - 14:54 | 1547586 Freddie
Freddie's picture

How about all the loans and credit cards they gave to illegal aliens?  Those repo houses are underwater and the other collateral is back in Mexico, Pakistan, Brazil, etc.  ***k BAC.

Wed, 08/10/2011 - 15:26 | 1547700 gangland
gangland's picture


BAC is bankrupt and yeah FUCK BAC.

Wed, 08/10/2011 - 13:23 | 1547222 Drag Racer
Drag Racer's picture

well is this not most convenient for the halting of bank stock trades


(I call bullshit)

Wed, 08/10/2011 - 13:26 | 1547235 Caveman93
Caveman93's picture

They are asking for his and her KY. Weird.

Wed, 08/10/2011 - 13:28 | 1547246 Arch Duke Ferdinand
Arch Duke Ferdinand's picture

"AMERICAN STUDENT LOANS" will be "THE STORY" in the very near future.

*****Moodys Warns Student Loans May Be the Next Financial Bubble.

10/20 million American Students Should Starve the US Government from its Taxes.
Can 10/20 million American students be jailed?.....

*****Eight Reasons Young Americans Don't Fight Back: How the US Crushed Youth Resistance

10/20 million American Students Should Starve the US Government from its Taxes.
Can 10/20 million American students be jailed?.....

*****The Creek...short video.

Parallel to knocking your head in the Stock Market...

Wed, 08/10/2011 - 14:18 | 1547434 iDealMeat
iDealMeat's picture

Thx ADF,  I've been thinking about this as well..  I bet a ton of "students" have taken their loan to the campus book store to load up on some iCrap and take advantage of the $ 50 bucks off with the .edu discount.

Those loans are low interest, but cannot be bankrupted away..

It won't end well..  Like everything else.

Wed, 08/10/2011 - 13:31 | 1547259 gangland
gangland's picture


now on mortgage risk and capital

* loan loss reserves 21 billion (june 30) + 37.3 Billion

* 120 day late mortgages are charged down to "net realizable value"

* GSE warrant liability not expecting increased putbacks (june 30)

* 5.3% tier 1 capital under basel 3

* still streamlining capital requirements to meet basel 3 jan 1 2013, 3.5% minimum reserves buffer

*150 billion in risk weighted assets that we will runoff in 2013 and beyond

* focusing MSR reduction

* Using deferred tax assets t increase run-through income



Wed, 08/10/2011 - 13:36 | 1547274 jmc8888
jmc8888's picture

I wonder who is the greater fool? Ben Bernanke, Democrats, Republicans, Tea party, Obama collectively as one (since they are) or those above the broke FDIC limit in BofA?


Wed, 08/10/2011 - 13:37 | 1547282 franzpick
franzpick's picture

Look how easy it is to stay out of your favorite bank stock during its bad times, or how easy it is to stay in the market during the good times, using 50/100 SMA crossovers:

Wed, 08/10/2011 - 13:41 | 1547296 Eagle Keeper
Eagle Keeper's picture

Speaking of HELOCs, If I have a $100K HELOC at BofA and it is unused, are they claiming my house as an asset?


Just curious. If so, I am gonna cancel it.

Wed, 08/10/2011 - 14:41 | 1547540 Jean
Jean's picture

You betcha, I bet your debt/equity ratio alone is holding up a whole tranche of crap and your house might be one of the few they actually have good paperwork on.  Cancel or burn on hookers and blow is a personal moral dilemma - if you go with the latter, post some pics.

Wed, 08/10/2011 - 15:30 | 1547727 gangland
gangland's picture


peruvian better than columbian, brunettes better than blones.

Wed, 08/10/2011 - 16:07 | 1547924 Things that go bump
Things that go bump's picture

Take the money, if they'll give it to you and invest in nice clean PMs.  Hookers and blow will damage your health.    

Wed, 08/10/2011 - 13:41 | 1547299 gangland
gangland's picture




Q: how can we trust current general balance sheet and mortgage reserves?

A: our models forecasting chargeoffs and delinquencies have been accurate so far and we base our reserves based on those. 4% chargeoff rate is not acceptable but rate is decreasing.

mortgage put back risks include GSE, monolines and private labels, all reflected on our balance sheet.

Q: what about derivative exposure?

A: we dont have the kind of assets that are tougher to value relative to the industry. we continue to monitor the values and we continue to reduce and work off our exposure.  Auction rate securities reflect the current market and when we sell them we get consistency on the balance sheet. these are price verified assets that are mark-tomarket and are reflected on our balance sheet monthly.

Q: Given AIG etc, how can investors be sure there is no massive hole in your balance sheet?

A: we have been settleing our putbacks across classes and accounting for the unforseable visavis our balance sheet.

Q: how can investors verify your numbers?

A: we have a strong management team and strong process and outside 3rd parties. our reserves are being released which means theyre excessive.  we have regulators and counterparties constantly looking over our shoulders on a quarterly basis.




Wed, 08/10/2011 - 13:52 | 1547352 papaswamp
papaswamp's picture

Melt up commence


Wed, 08/10/2011 - 13:54 | 1547359 Maybe-Not
Maybe-Not's picture

? Who is going to go and punch ken lewis in the face for being so stupid as to buy countrywide

Wed, 08/10/2011 - 16:09 | 1547935 Things that go bump
Things that go bump's picture

I always thought that was a shotgun marriage.  

Wed, 08/10/2011 - 13:56 | 1547364 Jim in MN
Jim in MN's picture

When did you stop beating your...shareholders...not today I guess

Wed, 08/10/2011 - 13:57 | 1547366 iinthesky
iinthesky's picture

So far he hasn't been asked or answered any of the questions above.

Wed, 08/10/2011 - 14:55 | 1547376 gangland
gangland's picture


Re credit protfolios and losses under different vintages: "we're past the tipping point" 2005-2008 vintages have been largely reflected on our balance sheet.  delinquincies and chargeoffs are decreasing despite unemployment rate, breaking correlation.

Q: tremendous "bad" label mortgage loan book, explain.

A: mostly related to legacy assets.  15 million loans, about 50% of which are delinquent. working on getting deliquencies down and working through them by lowering servicing costs of legacy loans by selling some of them (foreclosing on others).  on commercial real estate chargeoff are down to about 200million per quarter. heloc delinquencies and foreclosures are higher than non-secured assets.

Q: how do you get to 45 billion pre-tax income?

A: a) economy must be robust b) higher interest rates c) fed funds rate of 1.5%

Q: earnings enough to resolve all issues without raising capital?

A: all capital is moving from non-core to core under basel 3, we feel comfortable with that.

Q: re profitability, can you return 1% on assets and 10% return on equity?

A: blah blah blah basel 3, 1% roa is reasonable for our balance sheet, will be fine tuning balance sheet to achieve that, optimize franchise, trading business. got to get to roi to get to roe.

Q: what about dividends?

A: looking to run franchise with our capital expectations and requirments, share capitalization is our focus, our longer term view: once we get comfortable with our capital requirements under basel 3 we will look at returning capital to shareholders.




Wed, 08/10/2011 - 14:15 | 1547415 gangland
gangland's picture


Q: if stock is so cheap why arent insider buying?

A: moynehan: all our financial worth is tied to stock, with all the volitility around we have to wait to invest over time, all our net worth is tied to the company.

Q: if countrywide is ring-fenced y not chap 11 for country wide?

A: the path we've taken is in the best interest of the shareholders.

Q: when do you go on ofesene re critics? when is enough enough?

A: i'd say enough is enough already and we go on offense in the markets everyday.  our liquidity is over 400 billion dollars blah blah blah

Q: how do you rate your performance?

A: strong. in a multi year transformation. share performance weak, we have to control the controls.

Q:how do you make up for loss of consumer fees?

A: we will make up for over draft fees by swithcing to monthly fees for retail. our strategy is, monthly fees, rise in rates, operating costs. retaining customers more than before.

Q: why not allow retail to opt in on over draft fees rather than monthly fees?

A: we do we allow them

Q: on mortgagees and foreclosures?

A: strong investor demand on buying properties and renting them. system is unclogging in states where process is moving through.  on foreclosure assesments and fees, we are expediting the process, focusing on short sales to get through inventory.  15 million mortgage book, 50% is 60 days late, but rate not increasing as fast as before.  will try to modify those we can.

end of email q and a




Wed, 08/10/2011 - 14:15 | 1547416 ReallySparky
ReallySparky's picture

Oh that's nice, they are going to let the Homeowners live. Ha.  Answer to last e-mail question.

Wed, 08/10/2011 - 14:18 | 1547438 iinthesky
iinthesky's picture

He hasnt been asked any of those question and said absolutely nothing.

Wed, 08/10/2011 - 14:23 | 1547457 monopoly
monopoly's picture

Well done Tyler, but am afraid all he will do is talk about the E ride, Space Mountain at disney.

Wed, 08/10/2011 - 14:29 | 1547483 iinthesky
iinthesky's picture

Call's over.. they ignored it all

Wed, 08/10/2011 - 14:30 | 1547484 gangland
gangland's picture

live questions:

Q: jim mahoney from oxford financial: comment on euro exposure? impact? new marginal capital needed?

A: no capital question here for q2. we have decreased our risk overall.  our global markets team is strong and ahead of the curve.  our technical risk and exposure is focused on PIIGS.  we have tweeked our risk comfort level. 16.7 billion in exposure, 1.6 billion to soverreigns, 1.5 covered by cds.  everything is marked to market every night.  our exposure is to large public multinationals and we buy credit protection on those. this is not a risk issue as much as it is an economic issue.

Q: morning star: more detail on rep and warrants?

A: what happens to home prices impact our collateral losses. 3% decline in home prices over 2011 and modestly up in 2012 to about 1%. our reserves reflect our dealing with the gse's, non-gse's rep and warrant assumptions are being workd through and reflected on our balance sheets.  the 2 data points we focus on are our reserves vs median home prices.

Q: richard chan: dollar amount of down side risk to euro derivative positions? confidence?

A: even in 2008 we managed our risk portfolio.  we establish by country how much risk we want to take and allocated accordingly. re counterparties, we post collateral every night, making sure collateral flows are what we expect.  no dollar amount, other than VAR which is public and you can look up yourself, we use other metrics as well.

Q: got a message to the critics?

A: our liabilities if they are "reasonable" can be worked through as we have with gse's and monos and private lines, some people think there is more there, and we'll see them in court.




Wed, 08/10/2011 - 14:43 | 1547549 Jean
Jean's picture

Did the CEO's brother ask that las question

Wed, 08/10/2011 - 15:11 | 1547645 Arch Duke Ferdinand
Arch Duke Ferdinand's picture

...Hank Paulson, Geithner, all the TBTF CEO's, Regulatory Officers, INCLUDING THEIR FAMILIES, should all be threatened by Hanging unless they cough up Who Put Them Up To All This Mess.


Thu, 08/11/2011 - 02:24 | 1549954 FIAT_FixItAgainTony
FIAT_FixItAgainTony's picture


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