Bank of America first “too big to fail” bank, to fail? 3 updates

All eyes focused on a big financial domino, Bank of America…

Today, August 22, 2011, Bank of America (BAC), came under intense pressure and scrutiny, BAC credit default swaps (CDS) experienced a dramatic rise.  It was within 30 bps (basis points) of 400, where it triggered the bank bailout by the Federal Reserve Bank (Fed) in March of 2009.

At the same time Bank of America stock was tanking.  BAC, already suffering from the past acquisitions of Countrywide Financial Corporation and Merrill Lynch & Co, moved closer to the precipice.  BAC stock decline of $0.44/share was a 6.3% decline in the stock value.

Fed watchers are evaluating the possibility of a collapse in BAC shares triggering a domino sequence threatening Citicorp, JP Morgan-Chase, and Wells Fargo.  The Fed is in no position to shore up any more than one of these giant banking systems.  The entire American Monetary System is on the brink, everyone is watching to see how this plays out.

Because this event follows multiple previous bailouts, compounded by the Fed loaning over $1 trillion to European banks, our monetary system, as well as our culture hangs in the balance.  The next few weeks will determine our future.  All this, while the US 2012 Budget soap opera prepares to play out on the American political stage.

The time for white wash and political posturing has past, now we will see whether there is any integrity left in America’s political and financial structure.  It doesn’t look good.

Geoff

Postscript: August 23, 2011 Here’s Why Bank Of America’s Stock Is Collapsing Again: http://www.businessinsider.com/bank-of-americas-stock-collapse-2011-8

PS2: August 23, 2011 Why is Bank of America’s Stock Cratering Yet Again? It’s the Extend and Pretend Endgame « naked capitalism: http://www.nakedcapitalism.com/2011/08/why-is-bank-of-americas-stock-cratering-yet-again-its-the-extend-and-pretend-endgame.html

PS3: August 25, 2011 Buffett to invest $5bn in Bank of America – FT.com: http://www.ft.com/cms/s/0/f4a489d2-cf1c-11e0-86c5-00144feabdc0.html#axzz1W3k3gUt5

References:

1)   August 22, 2011 Bank Of America CDS Hits Escape Velocity | ZeroHedge: http://www.zerohedge.com/news/bank-america-cds-hits-escape-velocity

2)   August 22, 2011 Mish’s Global Economic Trend Analysis: Bank of America Tanks; Gold Goes Parabolic, No Telling Where It Stops: http://globaleconomicanalysis.blogspot.com/2011/08/bank-of-america-tanks-gold-goes.html

3) August 22, 2011 Visualizing How Bank Of America’s Reserve Accounting Errors Are One Giant “Subprime CDO ” | ZeroHedge: http://www.zerohedge.com/news/visualizing-how-bank-americas-reserve-accounting-errors-are-one-giant-subprime-cdo

4) August 22, 2011 Bank of America Shares Pummeled Again – CNBC: http://www.cnbc.com/id/44229756

5) August 19, 2011 Bank Of America To Slash As Many As 10,000 Jobs | Neon Tommy: http://www.neontommy.com/news/2011/08/bank-america-slash-10000-jobs

Also, see previous GeoffTalk.com posts on related subjects…

 

This entry was posted in Debt, Derivatives, Geoff Yuen, Government, Monetary, Philosophy, Politics and tagged , , , , , , . Bookmark the permalink.

2 Responses to Bank of America first “too big to fail” bank, to fail? 3 updates

  1. V says:

    What BofA, the rest of Wall Street and Corporate America needs to do is strategically plan to increase layoffs during the 2012 election year such that they ensure the layoffs show up in the unemployment data as a rising trend leading up to November 2012.

    Ensure that the U2 unemployment figure rises above 10% just as the election rolls around.

    • Geoff says:

      In addition to your suggestion for Wall Street and Corporate America, the government is doing its share to boost unemployment, by letting the USPS layoff 200,000 workers, most before the 2012 election.
      Thank you for your thoughtful contribution.

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