Why Bank of America tankedBank of America was the biggest loser among Dow and S&P 500 stocks, down 20.3% to $6.51. Investors worried the banking giant won't be able to handle all the problems created by its mortgage business. The selling accelerated after a big hedge-fund manager sold out his stake.
It's not clear if the collapse today of Bank of America's stock price means the government may be forced to extend assistance again. Most of its problems are mortgage-related and directly the result of its disastrous 2008 acquisition of Countrywide Financial.
It was hit with two bits of bad news today: American International Group (AIG) sued the company for more than $10 billion over what it called a "massive fraud" on mortgage debt, deepening the litigation morass facing the largest U.S. bank.
AIG said it expects to pursue other litigation to recover losses from counterparties that "sought to profit at our expense." Taxpayers still own 77% of AIG, which received $182.3 billion of government bailouts.
The other was that hedge-fund manager David Tepper, who won big in 2009 betting on battered bank shares, now is bailing out on some battered bank shares.
CNBC said Tepper’s Appaloosa Management sold its position in the banking company.
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Showing posts with label cause of the crisis. Show all posts
Showing posts with label cause of the crisis. Show all posts
Monday, August 8, 2011
Bank of America hit hard
Here is a story from MSN money that talks about today's market collapse and some reasons why Bank of America went down so hard.
Wednesday, December 15, 2010
Bank State Already Here
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Wall Street slapping everyone in the face as they issues huge bonuses
More and more stories are coming out that continue to verify our bank owned status.
from Yves at Naked Capitalism:
The New York Times reports that the Republican members of the Financial Crisis Inquiry Commission are going to pre-empt the report (due in mid-January) and issue their own 13 page screed later today focusing blame for the crisis on…Fannie and Freddie, and no doubt the CRA too,
Let’s look at a few inconvenient facts. We had housing bubbles in the UK, Australia, Ireland, Spain, Iceland, Latvia, Canada, and a lot of Eastern Europe. Can we blame the CRA and Fannie and Freddie for that? How about the M&A boom, which resulted in a ton of leveraged loans being issued at super low spreads? If the Fed and other central banks had not driven rates to the floor, we’d see a good bit more distress and dislocation in this sector of the market. Oh, and how about the fact that banks in Continental Europe, which had no housing bubble in their home markets, and no evil Fannie or Freddie analogues, also nearly keeled over in the crisis?
This whole line of thinking is garbage, the financial policy equivalent of arguing that the sun revolves around the earth. Yes, the US and other countries provide overly generous subsidies to housing, and curtailing them over time would not be a bad idea. But that’s been our policy for decades. Calling that a major, let alone primary, cause of the crisis, is simply a highly coded “blame the poor” strategy, In reality, both the run up to the crisis and its aftermath were on of the greatest wealth transfers from the citizenry at large to a comparatively small group of rentiers in the history of man. (If you want to read the long form debunking of this thesis, go straight to Barry Ritholtz, a Republican who has shredded this brand of class warfare, or as he calls it, “one giant clusterfuck of imbecility,” repeatedly on his blog.) " end quote.
So you can see the spin continues as the government and politicians begin to create a justification for their nepotism and irresponsibility. Anything they can do to shift blame away from banks and Wall Street is being done. For Some reason the public has been brainwashed into believing managing money was something only the elite could understand. Seldom has the financial industry ever been questioned or held accountable for any of their transgressions in the past but they need to be today. Wealth Transfer is not nearly a complete definition of what has occurred the past few years. Of course wealth has been transferred but the life of the economy was stolen as well. So as hard working people are left to struggle on their own, the bailout kings are getting multi million dollar bonuses again.
More On Rentiers Here
Decision Points
Kindle Wireless Reading Device, Wi-Fi, Graphite, 6" Display with New E Ink Pearl Technology
Wall Street slapping everyone in the face as they issues huge bonuses
More and more stories are coming out that continue to verify our bank owned status.
from Yves at Naked Capitalism:
The New York Times reports that the Republican members of the Financial Crisis Inquiry Commission are going to pre-empt the report (due in mid-January) and issue their own 13 page screed later today focusing blame for the crisis on…Fannie and Freddie, and no doubt the CRA too,
Let’s look at a few inconvenient facts. We had housing bubbles in the UK, Australia, Ireland, Spain, Iceland, Latvia, Canada, and a lot of Eastern Europe. Can we blame the CRA and Fannie and Freddie for that? How about the M&A boom, which resulted in a ton of leveraged loans being issued at super low spreads? If the Fed and other central banks had not driven rates to the floor, we’d see a good bit more distress and dislocation in this sector of the market. Oh, and how about the fact that banks in Continental Europe, which had no housing bubble in their home markets, and no evil Fannie or Freddie analogues, also nearly keeled over in the crisis?
This whole line of thinking is garbage, the financial policy equivalent of arguing that the sun revolves around the earth. Yes, the US and other countries provide overly generous subsidies to housing, and curtailing them over time would not be a bad idea. But that’s been our policy for decades. Calling that a major, let alone primary, cause of the crisis, is simply a highly coded “blame the poor” strategy, In reality, both the run up to the crisis and its aftermath were on of the greatest wealth transfers from the citizenry at large to a comparatively small group of rentiers in the history of man. (If you want to read the long form debunking of this thesis, go straight to Barry Ritholtz, a Republican who has shredded this brand of class warfare, or as he calls it, “one giant clusterfuck of imbecility,” repeatedly on his blog.) " end quote.
So you can see the spin continues as the government and politicians begin to create a justification for their nepotism and irresponsibility. Anything they can do to shift blame away from banks and Wall Street is being done. For Some reason the public has been brainwashed into believing managing money was something only the elite could understand. Seldom has the financial industry ever been questioned or held accountable for any of their transgressions in the past but they need to be today. Wealth Transfer is not nearly a complete definition of what has occurred the past few years. Of course wealth has been transferred but the life of the economy was stolen as well. So as hard working people are left to struggle on their own, the bailout kings are getting multi million dollar bonuses again.
More On Rentiers Here
Decision Points
Kindle Wireless Reading Device, Wi-Fi, Graphite, 6" Display with New E Ink Pearl Technology
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