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Stunner: Bank Of America Responsible For 14% Of Projected 2012 S&P500 Earnings Growth
If there is one piece of data that should make you scrap all optimistic forecasts for 2012 year end S&P price targets and EPS forecasts, it is the following chart from Morgan Stanley which shows the relative contribution of financial stocks to the change in full S&P earnings (combined they account for 26.3% of the change from the actual $883.5 billion to $970.6 billion). Specifically we are looking at Bank of America, which with a forecast surge in Earnings from ($2.5) billion to $10 billion accounts for 14.1% of the entire change in S&P earnings forecasts. And since the S&P is simply the Earnings number multiplied by some multiple, all consensus views that have 1400 as their 2012 year end forecast rely on bank of America to account for nearly 20 S&P points! The US market has now devolved to such a sad state when the most insolvent of all US banks has to carry nearly the bulk of earnings growth in 2012. At least with Apple they produce something - unfortunately in BAC's case it is only legal fees for the avalanche of endless litigation against them.
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That's a lot of rehypothecation there...
GAAP will simply allow them to count client deposits as company earnings - boom, S&P to infinity!
SP at 850 was the real estimate. This 1400 only works if one believes that BAC is anything but insolvent....
MS has such an amazingly accurate track record. this call is pure genius. dont worry, they cant possibly be trying unload a shitload of BAC on unsuspecting sheeple
If this were late 1999 or VERY early 2000, BAC would be one of Jimmy Jam Cramer's Winners of the New World.
You mean to infinity and beyond..
With all those great Merrill Lynch derivatives assets the S&P is headed to another quantum dimension.
The banks are begging to hit their stops on silver in at $24.80. Funny how this works though. Chase the stops and equity falls. Hit the stops and you are richer, but with less equity. I am sure Bernanke and Timmah's PWG and ESF have this covered though. Let BAC et al chase the stops, and when they hit, the ESF and PWG can come in and BTFD! Everyone wins.
Doesn't Central Planning rule?!
Actually this piece of prognostication can be completely discredited as any forecasting for 2012 is moot before it even leaves your pen/tongue.
In the words of the man who forced Aspartame into the collective diet, this is the year of the Unknown unknowns.
That said, the make up of the companies on the chart tell a story of what we saw LAST YEAR and i think Apple will slide down and off faster than you can say ipooed. Apple gets Shanghaied will be a headline we will see.
Caterpillar biz in the developing world is booming, Schlum, more OIL. GooG.... this might be a banner year for them as they monetize all the freebies they have released into the app-sphere and mobile/money transfer space.
The financials...welll...
All in all, I see a vastly different list, perhaps dreaming of discussing it on 01/04/2013 might be the pipe-dream?
ori
/2012-the-year-of-anomaly/
All in all, I see a vastly different list, perhaps dreaming of discussing it on 01/04/2013 might be the pipe-dream?
No. You or I may not be here to read about it but plenty of other spacemonkeys will.
Apple gets Shanghaied will be a headline we will see.
How? Why?
Margins compression, exchange rate disfavour due to imminent USD decline, China/Taiwan/Thailand/Malaysia instability (low cost mfg. centers are seeing crazy food price inflation, so those penny wages will not last long this year) and my own personal wish to see it be so.
Add to that the fact that we are still in the Jobs Halo Era for Apple. Let su see what a real Jobs-less product launch looks like for them.
ori
edit: Most important, they are a purely connedsumer facing company facing a dying connnedsumer base. Globally but especially in the US/EU.
is that you Reggie?? apple will be up another 25% this year minimum, the iphone5 will crush it even more than the iphone 4s, new options for the ipad will come out, including a cheaper one to take market share away from the kindle fire, etc., tim cook will continue to show he is an operational genius while delegating vision/design, iTV will be kick ass and voice commanded, throw your lame ass clicker away.
"iTV will be kick ass and voice commanded, throw your lame ass clicker away..."
---
Nouriel Roubini will have to keep his clicker...
LOL "Margins compression"
It's Reggie Repeat, Repeat...
Sorry, but this doesn't sound too convincing.
I'm long PMs, so this doesn't concern me too much, but if USD drops, they'll make more in USD.
And CNY is tied to USD, so their costs won't increase much.
I like to think I'm as much of a perma-bear as most here, BUT if the Fed (all doves now) decides to buy mortgages in some form or another don't you think BofA won't already have them bundled up ready to sell as if they knew ahead of time? If they can offload their garbage paper the bank might become less of a zombie. I wish for them a quick demise but I won't be surprised to see their stock at $12 if their friends funnel enough tax-payer money into their coffers. Don't bet on their quick death. Look at what happened the last two times their stock hit $5. They call it TBTF for a reason.
"the bank might become less of a zombie"
Is that like being partially pregnant?
Won't be able to off-load the shitload of lawsuits still on the books- they aren't in any hurry to leave the Government Teat...
If the Fed does absorb their garbage, then they're no longer TBTF.
As usual, the common won't be the winner here.
Lawyers are better at kicking the can down the road than most people are. Bought off politicians can 'solve' legal issues with new rules. Plus I'm not saying that the $12 or whatever will stay around. If it ever gets that high, short it again.
Good point Fred. Remember, BOA was going around last year, offering "help" at politcal gatherings. Their man will be in the White House, regardless of who he is.
They can get more 'action' in the UK than in the US: (we have a 140% rule here in the US)
http://www.imf.org/external/pubs/ft/wp/2010/wp10172.pdf
They have banking houses in Londontown. These beasts are global. The fact that the excahnges still say "US" makes me laugh. There is nothing American about the corporations that imbeded themselves here. The CEOs are global warlords of global kingdoms, to say the least.
...Hendrix (Global Beasts)
Yeah, I know. I'm just suggesting that if BAC wants to lever to the max they may pick a partner in UK which could be dangerous to primary or even secondary depositors there. We at least have some protection through SIPC here. (debatable for sure, but in UK poor depositors have no warning and no protection.) They will not even know that BAC borrowed from one of their banks. It might be on p. 14 of some biz journal.
See p. 4 (bottom of first paragraph) "... little statutory protection..."
http://www.imf.org/external/pubs/ft/wp/2010/wp10172.pdf
It makes perfect sense to me. After all, who wouldn't want to buy BofA? It's a perfectly run company with a strong balance sheet and no legal trouble at all. [/snark]
Robotard?
[/serious]
Relying on the Giant Squid's 25,000 employees to produce 4.5% is nearly just as silly. I believe we have witnessed the end of the begining of the collapse in financial engineering. John Law is dead...again!
Well to put your comment together with the comment below (on zombie bees)... The following:
An Asian wasp stings a cockroach in the brain and injects venom that controls where the roach walks. Then it lays its egg on the roach, and its larvae eat it alive.
And there's an Amazonian nematode that, once inside an ant, turns the insect's abdomen the same bright hue as a tasty berry. The ant is eaten by birds, who spread baby nematodes through their droppings.
The squid evidently takes its cues from Asian wasps & Amazonian nematodes...
francis, thanks for that informative post! :-)
Nature is AWESOME!
ori
Is this the time in the script when the Alien "chest buster" blows out of me then?
consider yourself lucky if it only blows out of your chest...
Squid tentacles are busting out everywhere. Ahhhhhh!
The WIFSM moment (what's in-fucking-side me?) moment.
This is why at the end of the day, I say the dollar has died. It is dead because that was its fate from day one: spin derivative after derivative off of its back, and when the debt/credit is more than growth, deflate that baby and cause its percieved worth to fall. Then all other assets rise.
Yet this is not some batshit crazy theory that I have come up with. No! It is economics 101, where textbooks writ by Ben S. Bernanke say the same thing. Ah yes, Central Planning again.
Absurdium off to a fine start in 2012. The zombie bee story out of California has far more relevance than any Wall Street forecast. The sham is a shame.
The tbtf banks are in runoff. No one will say it but that is the reality.
The world can't see this! Our stock market is king.
lolwut...how what...
Ehhh...USO is going ape shit.
Tis like the ripple effects of dumping a giant turd into a bathtub (pun intended Buffet)
Speaking of Buffett, it's time to submit your 2012 "DEAD POOL" entries. Pick 5. Winner gets the satisfaction of knowing the world will be a better place without these parsites.
1) Charlie Munger
2) Walter Haefner
3) Charles Bronfman
4) David Rockefeller, Sr.
5) Leonard Litwin
6) Momauguin Joe?
6) Heartless Dick Cheney (What an evil misuse of medical technology!)
And the bankers in our midst are perpetually referred to as the brightest amongst us. NY, NY so obviously needs a zombie apocalypse...just to thin out the patently stupid...that being...NY bankers.
Here comes big daddy Oil bustin into the room to rape, pillage, and plunder.
And in related news....DB and GS at it again....stupidity. Both have now encourage sheeple to buy CMG...right here at near all time record highs. It used to be that a hack firm like Longbow would be asked to make these kinds of patently stupid calls...but now it is none other than the financial illuminati itself.
To get a sense of just how stupid this call is, during yesterday's market gap up joy joy fest, one sector in particular was obliterated from the opening bell. You guessed it...the restaurant sector. So look for some of the ABSOLUTELY DUMBEST BANKERS IN THE WORLD to follow their marching orders...and arbitrage stupidity appropriately.
Go crude oil! Duh.
The hilarity would be if the earnings came through but they still went bankrupt. Go long baling wire and chewing gum!
How is this a stunner? almost 30% of the economy is simply paper-pushing bullshit. The only "busness model" that has worked since 2001 is the "fail and get bailed out" model.
Stunner would imply surprise. I am just LOL, like SD1. More insanity...
LOL WTF??
Good luck with that.
Total Top 6 Financials (including GE) .....26.3%
Translation: Total Top 6 Financials (including GE) will be 26.3%, maybe higher, as printed fiat from Brain Sack and Ben Bernanke will ramp these insolvent piece of shit institutions as reward for their further RUS2k force feeding and laundering ponzi.
There's a difference between earnings and a stock price. Insert the term "not for nothin'" if that helps you understand. (people up here always preface what they're about to say with that term. What does it mean actually?)
I understand "on paper" in a legitimate functioning system (read: fairytale) there's a "difference". However, with "Mark to Make Believe" accounting, (as well as a baker's dozen of other manipulated system "tools" provided by CONgress, Fed and regulatory agencies), these banks have nuked all lines of "difference". In conclusion, "earnings", "stock price" and any other technical/formula that quant/quals worth, value, trend, etc is just a big f'ing lie.
I refer to one of my past quotes (if that helps you understand):
"A pile of shit covered in frosting is not a cake."
I would love to see BAC collapse in the next couple months just to see MS eat more crow.
but nevertheless that will be good for moving ahead to pos territory, remember, the show must go on and the FED will do the utmost to make wondres happen, fat bonusses for WS, whether we like it or not, it's system imminent.
All this baked in 2012 growth projections....just like 2011 will all be LUCKY just to break even on the year!
plane out fucking ridiculous
if they do that well, their DVA losses will be 10 billion!
What about their DVDA losses?
for the dummies - what is TBTF?
TBTF = Too Big To Fail
:)
too bloated to fart
You mean it isn't
The big turd floating????
In the tub of course
Your fascination with testicles is unhealthy...
It is a picture of a hairy ass.
It's Hairy Wanger's identical twin (separated at birth)...
It's a picture of her hairy boobs.
MBIA trades flat or lower on the "unfortunate" news from the New York courts yesterday. (sarc off)
http://www.bloomberg.com/news/2012-01-03/mbia-wins-judgment-ruling-again...
none of these banks will fail and this is exactly why the S&P will go even higher than 20% this year. Keep those negative comments coming ZH,just makes it eaier to go up.
Well good luck to you. You are gonna need it.
pods
He doesn't need luck, he has blind faith. It's much better, because he will always have it. One can not always be lucky, but one can be perpetually ignorant.
Word is the Treasury Department is working on a new Building Wing to house their "Banker/Cyborg relations people." By banker/cyborg measures "they're still not paid as good as we are."
They need to organize. :)
Yes, and so will inflation. Good luck fucknut. If you can't put your hands on it, you don't "own" it and chances are it has already been stolen or does not even exist to begin with. LOL!
Ann Barnhardt says that if you can't roll around on it naked while holding an assault weapon, you don't own it.
"...go higher than 20% this year...."
Sounds about right- 20% of 1300 puts you at about 260 on the S&P.
Good luck with algebra this year.......
S&P did nothing last year, but youre calling for a 20% higher this year? Go put your money where your mouth is then, I bet you dont.
deleted
Wow, just think of the management bonuses if they hit that target (preceeded by either a plus or a minus - makes no difference to them).
Are they going to put up a javascript that simulates people downloading digital funbux that must be paid back in something real run by crapple?
Then they the just make the javascript run faster and faster until people are downloading trillions of funbux an hour.
It's called Farmville
HAHAHAHAHHAHAHHAHHAHAHAHAHHAHHHAHAHHAAHAHHAHAHHAHAHAHAHAHAHHAHAHHAHAAHHAHAAHAAHAHAHAHAHAHHAHAHHAHAHAHAHAHAHAHAHAHAHAHAHHAHAHHAHAHAHAHAHAHAHAHAHAHAHHHAHHAH
Don't laught blackstone is all in on this one. They put up irradiated commercial japanese property as collateral and are selling iShares of it to Calpers.
Schwartzman built a trust.. for post squirmish construction funds for petroleum infrastructure in Iran.
SHHHHHHHHHHH! don't tell anyone.
better check your spelling on that...
Perhaps they meant 14% of growth at Law Firms??
Do bailouts count as growth??
Cancerous.
At least with Apple they produce something
They being Foxconn, right?
Jump you fuckers!
So if a bartender stuffs you full of booze and gives you the carkeys he's culpable and in most cases criminally liable.
It's the same fucking thing with credit, get people doped up and drunk and hand them the keys to a house.
Bank of America - crashing the American dream drunk and stoned every day!!
Fuck them and fuck you if you bank with those fascist TBTF ass clowns in pinstripes.
Don't forget that BAC moved their entire derivitives book into the main bank holding company! Way wrong but puts them in the really to big to fail catagory some day. If the US has to bail out BAC when the derivitives implode, as they will, we will need QE 4, 5 and 6 to bail them out. What a f...ing bank run that would be! 2012 will provide plenty more entertainment!
Pardon me, but....are these the same "analysts" who forecast that Bank earnings would grow 32% in 2011 when (actually) they fell 18%?
+1 The very same.
Dick Bove must watch porn all day long before he gets on TV. There is no other excuse for being so clueless.
Even a broken clock on Venus, (which requires 243 'Earth Days' to complete one rotation), is right twice a day...
Brian Moynihan could fuck up a wet dream
Where the fuck is Ken Lewis? Oh that's right -- richestan!
If I saw that limp motherfucker bloody and laying on the sidewalk I might confuse his face for a public urinal -- just like he did to the taxpayer.
Way to go, Ken, way to fuck over your country and the common good!
You, and your family deserve torment and hell -- I hope 2012 sees your demise.
Ken Lewis = FAIL of the century.
Dunno. He has all that money and he is not in jail. He put the suck in success.
Even Bloomberg had an article on future bank earnings ramping up. If I even cared about these parasite banks I would short them, but I have 0 interest in all of them.
Hope no one here still has any accounts at these filthy bastards.
Did not Reggie Middleton just call BAC insolvent on CNBC yesterday?
Well yes BAC is insolvent...but cant we just print more mountains of fake money and hand it to the TBTF and keep expecting no total implosions of anything?
I see Santa Clause wrote the S&P forecast before he left to go back to the North Pole...
Are there some Jim O'Neill interns on this thread? That 14.1% growth contribution must be a typo or something. Because it is totally insane. Even if BAC is bundling its CMBSs for Fed offload in Q2. Ride BAC for the Sack trampoline when it touches on $5 (the line in the sand) and then flush. BAC will go BAC(K) to $5 once or twice more this year or go BK.
Sure.
And the world will come to an end in 2012 too !
Banca San Paolo
Monte Paschi Siena
Unicredito
DEFAULT ALL
Yesterday the MBIA's knife is inserted. Today a nonsensical forecast about the knifee being the saviour. Did the MS not want to waste the useless research that led to an erroneous conclusion? MS knows BS.
It has to one of these two:
(1) Morgan Stanley is committing one of the most egregious crimes of our life time in that they are hurrying to offload their bad, and soon to become worse, investment ever. In other words they know what is coming. Or...
(2) The Fed has, or is scheduled, to take all of the mis-marked assets off the balance sheets of our banks. I have said before that this is one of the only ways that this mess blows over here in the US. The FED is not accountable to anyone and no entity has a complete audit authority over the FED. They could (and probably are) be swimming in shit up to their eye balls and nobody would ever know it. The FED would in essence trade 20 years of low returns for hundreds of years of guaranteed prosperity. Actually, I think they could pull it off and still make billions. So our legislatures basically make a deal with the Devil himself.
I didn't know Dick Bove was doing consulting work with S&P.