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BAC worth at least $40b! What am I missing?
March 11, 2009 – Comments (4)
I just read an article that highlighted some of BAC's assets that could be for sale which would total about $40b. The assets and their value are as follows: First Republic Bank $1.8b; China Construction Bank $19b; Blackrock $12b; Colombia Management $7.7b. Other assets they could sell include MBNA credit card issuer. Now, in this market it's unlikely BAC would get $40b and in any case they are locked into the China Bank until 2010. Nevertheless, the bank's current market cap is $30b. I gotta think the bank's deposit base is worth a lot of money, ML and Countrywide are also worth something. Of course, the albatross hanging over BAC is the amount of loan losses on their books (I'm assuming BAC threw everything including the kitchen sink in the losses ML incurred in the last quarter).
Lewis has said he does not think the bank needs more capital (perhaps he's looking at these assets to sell). He says the bank is operating at a profit, and some out there agree that the bank could turn in a profit this quarter (a few of the other banks are saying the same thing).
Tell me, what am I missing? We know the economy is "falling off a cliff" ...but Bernanke thinks the recession may be over by the end of the year, we know loan losses are going to be bad, we know the government does not want to nationalize the banks and will provide capital infusions and that funds will be provided to purchase "toxic assets". We know government's around the world are printing money, stimulating their economies, looking at moderating mark to market accounting policies etc
March 11, 2009 – Comments (4)
I just read an article that highlighted some of BAC's assets that could be for sale which would total about $40b. The assets and their value are as follows: First Republic Bank $1.8b; China Construction Bank $19b; Blackrock $12b; Colombia Management $7.7b. Other assets they could sell include MBNA credit card issuer. Now, in this market it's unlikely BAC would get $40b and in any case they are locked into the China Bank until 2010. Nevertheless, the bank's current market cap is $30b. I gotta think the bank's deposit base is worth a lot of money, ML and Countrywide are also worth something. Of course, the albatross hanging over BAC is the amount of loan losses on their books (I'm assuming BAC threw everything including the kitchen sink in the losses ML incurred in the last quarter).
Lewis has said he does not think the bank needs more capital (perhaps he's looking at these assets to sell). He says the bank is operating at a profit, and some out there agree that the bank could turn in a profit this quarter (a few of the other banks are saying the same thing).
Tell me, what am I missing? We know the economy is "falling off a cliff" ...but Bernanke thinks the recession may be over by the end of the year, we know loan losses are going to be bad, we know the government does not want to nationalize the banks and will provide capital infusions and that funds will be provided to purchase "toxic assets". We know government's around the world are printing money, stimulating their economies, looking at moderating mark to market accounting policies etc