BofA This Time? Bailouts Have Reached a Level Beyond Absurdity

"Anyone else have their hand out? - Lewis Black

With the announcement Friday morning that Bank of America (BAC) is getting an additional $138 billion, the bailouts have reached a level beyond absurdity. Has anyone at the Treasury noticed that the market value of Bank of America is only $41 billion right now?

With $138 billion you could essentially let BAC go under and start three new BAC's.

I've stopped crying. All you can do now is laugh. The only person you can turn to in a case like this Lewis Black.

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Comments

[cayman4444:]

This is yet another example of investors/business writers/bloggers/talki... heads that don't take into account debt when discussing the value of a company.
Yes, the "market cap" of BAC is what you said (+/-), BUT it is much, much, much higher when adding in the debt obligations (try $356 billion). If BAC goes out of business and can't honor its debts the result will be a calamity.

The same is true when consaidering the auto co.'s. A nitwit on CNBC said GM was only worth $2 billion, but when adding in the debt its "enterprise value" was actually $32 billion(!) If you wanted to buy GM you would have to assume the debts, so the price would actually be in the $30 billion range.

Same goes for BAC...

Jan 18 04:06 PM