Is Bank of America (down 15% today) in danger of collapsing?
This may be a dumb question, but do you think it would a good idea to pull my deposits from there and put them in gold for the time being?
Deposits are insured by the government up to $250,000. If you have more then that in a checking account then congrats to you.
This price is also the market's reflection of the firm's value, and not the tangible book value... The stock is currently depressed due to poor market conditions and some pending lawsuit issues, but thecompany itself is sound fundamentally... Your deposits are fine.
You were right that was a dumb question.
IMO now (not necessarily today) is a great time to buy, things are being way oversold. Does anyone trade FAS (3X leveraged bull financial ETF)? Was thinking about starting a new thread for this but mise well ask it here. Would love to hear about trading strategies for this ETF which is being clobbered right now.
I just posted this on the other BAC thread. BAC might be the next Bear Stearns:
http://www.nakedcapitalism.com/2011/08/bank-of-america-death-watch.html
Be careful.
@Chicago85 The sister ETF is FAZ (3x levered BEAR financials) and it should be screaming right now (haven't checked). If you're looking for maximum bang for the buck (and risk) FAS and FAZ options are the way to play it.
FAZ is up nearly 50% over the past 5 days.
Straddle? or is it too late?
If you feel like you have to do something, than yeah, maybe a straddle. But I'd be really reluctant to hold anything overnight right now.
bank run!
Should I clean out my accounts with BAC?
rumors they are going bankrupt ....
Cat's out of the bag:
http://www.bloomberg.com/news/2011-08-08/bank-of-america-drops-after-ai…
Looks like they're in capital raising mode.
Edmundo, you are 100% right. BAC is just like Bear. Bear had a huge deposit base and access to the Fed window.
Disclaimer: BAC is nothing like Bear.
LOL.
http://www.cnbc.com/id/44062517
Edmundo, you seem like a smart guy capable of thinking for yourself. You say that BAC is the next Bear and all you do is post links to other people's opinions. Care to elaborate on your position?
@jbs I hesitate for a couple of reasons. First, I was hearing Lehman-esque capital emergency rumors before any of the major wire services started reporting on them. You can bet your ass I wasn't going to be the first person to float that notion (publicly). That was a decision Patrick and I made together. So, in a sense they could be close to a Lehman-type liquidity crisis, but their situation is closer to Bear's (in my view) because the gov't would never allow them to go under. They'd be bought out by someone (who would buy them presents a very interesting debate).
If the stock drops below $5 (entirely possible if the trend continues), a whole raft of new problems come to the fore, not the least of which would be the non-marginability of the stock. There would be forced selling and net equity would be further destroyed.
I'm not saying any of this is happening, but both Bear and Lehman swore till their dying day that they were fine liquidity-wise -- until they weren't. The potential liabilities BAC is facing are absolutely staggering, and there's a lot of toxic shit on their balance sheet. Of course none of us wants to see a repeat of 2008, but it's foolish to think that it can't happen.
Unless I've missed something, BAC can just file for more TARP money, so that's a potential solution. But that's not gonna do the stock price any favors.
BAC, JPM, and C some of the biggest winners on the Dow today. Them alongside with the entire commodity spectrum like crude oil, soybeans, corn, etc.
All before the FOMC meeting at 2:15pm EST....
Translation: Helicopter Ben to the rescue.......
A lot of that shit is just realization that the financials and materials were grossly oversold. My entire board is full of 5%+ pops on materials equities that got crushed for little fundamental reason (other than "shit, commodities can be volatile - better buy Gold, KO and MCD!")
Can someone explain how Bank of America could have a liquidity crisis? Don't they have one of the largest deposit bases of any bank?
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