norcaljeff_IHB
New member
80% premium. BofA is gonna be strong after all this if they can survive the financial hurricane.
Headlines...
- Thread starter effenheimer_IHB
- Start date
NEW -> Contingent Buyer Assistance Program
Criminey...Nothing is ever as straightforward as it seems. If BofA stumbles, it ain't going to look pretty...
"At first glance, the new strategy by Paulson and Bernanke represents a much purer and tougher insistence that Wall Street work out its own problems without government help.
But that is only the first glance. If Bank of America acquired Merrill Lynch, its capital reserves would immediately fall below the minimum requirements for bank holding companies. Federal regulators, including the Federal Reserve, would have to show lenience for as long as it took the capital markets to regain their confidence — which could be quite a while."
Reminded me of a speech from about a year ago. Interesting, to say the least.
"May you live in interesting times"
- Bill Dudley, Exec. VP, Federal Reserve Bank of Philadelphia
Me...bought in at 27 @33% in. If it drops more I'll buy. I agree with the previous comments that Merill will make BAC stronger in the long run.
I seriously do not understand why people are so eager to buy banks at every single drop they take. BAC is still up 40% from its prior low, even after this drop.
Banks are DANGEROUS. You cannot VALUE the investment as the genuine book value will NOT Be disclosed. We have years to go until the real estate problem subsides.
In a potential DEPRESSION type of environment, banks will NOT thrive or recover quickly.
BAC will survive. Will it be a huge performer? So far none of the banks can hold on to gains for more than 2 months.
The ten-year return for BAC is now 18%, which is about 1% annualized. If you timed the bottom PERFECTLY and bought BAC at its bottom in 2000, you're still looking at a 8-year return of 45% for BAC, which is about 4-5% - no better than treasuries. Dividends tack on a 2% annual return throughout the last ten years. This is not a great risk profile.
How does buying an insolvent company, with who knows how much risk exposure, for 70% more than market price, with new issue stock that dilutes the present stock, make BAC stronger? Do you really believe that BAC bought Merrill without coercion from the Fed? BAC could have bought Merrill for for a quarter of what they paid if they waited another day or two.
Don't worry though. You will be able to buy more when it drops.
morekaos_IHB
New member
http://www.iht.com/articles/2008/09/15/business/15lehman.php?page=3
This should be verrryyyyy interesting tomorrow. I shall be in before the open
This should be verrryyyyy interesting tomorrow. I shall be in before the open
IrvineLocal_IHB
New member
morekaos said:
Criminey...Nothing is ever as straightforward as it seems. If BofA stumbles, it ain't going to look pretty...
"At first glance, the new strategy by Paulson and Bernanke represents a much purer and tougher insistence that Wall Street work out its own problems without government help.
But that is only the first glance. If Bank of America acquired Merrill Lynch, its capital reserves would immediately fall below the minimum requirements for bank holding companies. Federal regulators, including the Federal Reserve, would have to show lenience for as long as it took the capital markets to regain their confidence — which could be quite a while."
morekaos_IHB
New member
These are interesting times we are living in
IrvineRealtor_IHB
New member
morekaos said:
Reminded me of a speech from about a year ago. Interesting, to say the least.
"May you live in interesting times"
- Bill Dudley, Exec. VP, Federal Reserve Bank of Philadelphia
effenheimer_IHB
New member
TED spread: kapoom!
Check the one week chart.
Relevance: The TED spread can be used as an indicator of credit risk. This is because U.S. T-bills are considered risk free while the LIBOR rate reflects the credit risk of lending to commercial banks. As the TED spread increases, the risk of default (also known as counterparty risk) is considered to be increasing, and investors will have a preference for safe investments. As the spread decreases, the risk of default is considered to be decreasing
Check the one week chart.
Relevance: The TED spread can be used as an indicator of credit risk. This is because U.S. T-bills are considered risk free while the LIBOR rate reflects the credit risk of lending to commercial banks. As the TED spread increases, the risk of default (also known as counterparty risk) is considered to be increasing, and investors will have a preference for safe investments. As the spread decreases, the risk of default is considered to be decreasing
jbenko_IHB
New member
.PANDA said:
Me...bought in at 27 @33% in. If it drops more I'll buy. I agree with the previous comments that Merill will make BAC stronger in the long run.
muzie_IHB
New member
blackvault said:
I seriously do not understand why people are so eager to buy banks at every single drop they take. BAC is still up 40% from its prior low, even after this drop.
Banks are DANGEROUS. You cannot VALUE the investment as the genuine book value will NOT Be disclosed. We have years to go until the real estate problem subsides.
In a potential DEPRESSION type of environment, banks will NOT thrive or recover quickly.
BAC will survive. Will it be a huge performer? So far none of the banks can hold on to gains for more than 2 months.
The ten-year return for BAC is now 18%, which is about 1% annualized. If you timed the bottom PERFECTLY and bought BAC at its bottom in 2000, you're still looking at a 8-year return of 45% for BAC, which is about 4-5% - no better than treasuries. Dividends tack on a 2% annual return throughout the last ten years. This is not a great risk profile.
awgee_IHB
New member
blackvault said:
How does buying an insolvent company, with who knows how much risk exposure, for 70% more than market price, with new issue stock that dilutes the present stock, make BAC stronger? Do you really believe that BAC bought Merrill without coercion from the Fed? BAC could have bought Merrill for for a quarter of what they paid if they waited another day or two.
Don't worry though. You will be able to buy more when it drops.
EvaLSeraphim_IHB
New member
So . . . What's new?
jwbrown77_IHB
New member
AIG downgraded, speculation that they may not last until the end of tomorrow.EvaLSeraphim said:
jbenko_IHB
New member
.
Anonymous_IHB
New member
jbenko_IHB
New member
Couldn't help it stage 2 is in. Put in another 33% at high 26s with protective puts.
By the way...anybody ponder with the idea that Merrill deal could collapse? Or maybe a renegotiation of the original offer at $27 a share?
By the way...anybody ponder with the idea that Merrill deal could collapse? Or maybe a renegotiation of the original offer at $27 a share?
morekaos_IHB
New member
Ooops! somebody busted the buck.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a5O2y1go1GRU&refer=home
http://www.bloomberg.com/apps/news?pid=20601087&sid=a5O2y1go1GRU&refer=home
TimHume_IHB
New member
Here is an nice, graphical view of some of the financial meltdown.