One “tiny little error” resulted in red faces at both Bank of America (BAC) and the Federal Reserve when bank officials disclosed they had incorrectly calculated capital levels required for the annual stress tests. The Fed apparently did not notice the error until Bank of America notified them. This would all be very funny except […]
Oops! My Calculator was Broken – Red Faces for both Bank of America and the Fed
April 29, 2014 By Leave a Comment
Bank of America Has Built a “Fortress Balance Sheet”
April 6, 2013 By Leave a Comment
A short number of years ago, no one in his right mind would have associated the term “fortress balance sheet” with Bank of America. During the financial crisis, Bank of America was forced to accept a massive $45 billion bailout from the U.S. Treasury. As the financial system imploded during 2008 many people wondered if […]
Fed Says Largest Banks Would Lose Half Trillion Dollars Under Adverse Economic Conditions
March 7, 2013 By Leave a Comment
Based on the results of the Federal Reserve’s stress tests, the nation’s 18 largest banks would collectively lose a massive $462 billion under an extremely adverse hypothetical economic scenario. Reflecting the severity of the stress scenario–which includes a peak unemployment rate of 12.1 percent, a drop in equity prices of more than 50 percent, a […]
The Rally In Big Bank Stocks May Be Over
January 23, 2013 By Leave a Comment
For over the past year, the stocks of big banks have rallied significantly. Lower loan losses, a stabilization of the real estate market and a settlement with the government over shortcomings in foreclosure proceedings have all contributed to a growing conviction by investors that the worst is over for the banking industry. Here’s a look […]
Warren Buffett – “I Don’t Understand Why People Hate Bank of America”
January 3, 2013 By 4 Comments
Warren Buffett is probably confused. In a recent poll, consumers rated Bank of America as the second “absolute worst company in America.” How could so many people hate a bank which has provided generations of Americans with financing to build homes and businesses across America? Even as Bank of America seemed like it was headed […]
Bank Stocks Were 2012’s Best Investment – Now What?
December 31, 2012 By Leave a Comment
Bank stocks had few friends during 2011 during which time financial stocks plunged by over 18%, even as the S&P 500 eked out a slim total return of 2.1%. As financial stocks dropped last year to levels at which they were selling well below book value in many cases, buyers came back in force. During […]
Banks Are A Financial Disaster For Both Shareholders And Depositors
July 27, 2012 By 3 Comments
In days gone by, shareholders of large banks viewed their investments as a source of income via dividends and potential capital gains via share appreciation. In days gone by, depositors viewed banks as the safest place to harbor their hard earned dollars while earning a respectable amount of interest income. That was then, this is […]
Ridiculous Divergence Between Bank CEO Pay And Shareholder Returns
June 30, 2012 By Leave a Comment
The wide divergence between bank CEO compensation and shareholder returns is an embarrassment to the capitalist notion of linkage between performance and pay. Shareholders of banking stocks have seen the value of their investments pulverized over the past four years as the banking industry struggles to recover from the lending excesses of previous years. Shareholders […]
Bank of America Executives Win, Shareholders Lose – It’s Not Supposed To Work This Way
April 19, 2012 By Leave a Comment
Most shareholders understand that an investment in a public company entails risk – that’s what capitalism is all about. Well managed companies with great products generally wind up enriching shareholders over time and no one begrudges the fact that executives of a successful enterprise are well paid. What a lot of shareholders don’t understand, however, […]
What Big Bank Stock Has The Largest Price Gain In 2012?
March 19, 2012 By Leave a Comment
After getting pounded during 2011, bank stocks have soared this year, especially after the Federal Reserve completed its “stress tests” and said that almost every big bank could survive “extremely adverse” economic conditions. During 2011 bank stock shareholders experienced the biggest price declines since the financial panic of 2008. As worries mounted over both the […]