Market Currents

Despite urging investors to focus on "core earnings," Bank of America’s (BAC -0.4%) Q3...

Wednesday, October 17, 2012, 2:42 PM ET
Despite urging investors to focus on "core earnings," Bank of America’s (BAC -0.4%) Q3 results show its legacy mortgage problems are still part of its core. Every day, tens of thousands of employees service old mortgages and handle litigation and repurchase claims; BofA’s legacy asset and servicing unit employed 41K people - more than one in six employees - plus 17K contractors as of the end of Q3.

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This news story has 5 comments:

bbro Comments (7833)

One reason why the stock trades at 70% of tangible common equity...
What happens when this unit winds down over the next couple of years?

17 Oct 2012, 03:49 PM Reply Like

Mike Maher Comments (1749)

I agree, an investment in BAC won't be a quick win, but as things there, and in the economy, gradually improve, it should march higher. Some of their loans data was better than I expected, which hopefully is a good sign for the economy as well as the company.

17 Oct 2012, 06:36 PM Reply Like

Petrarch Comments (363)

Most investors are idiots - their problems are diminishing, their franchise is intact an the environment is improving.

Sure they won't get to 15% to 20% ROE anytime soon but they are priced for much, much less than that and the only direction here is up.

P

18 Oct 2012, 12:14 AM Reply Like

MexCom Comments (2796)

Its a bad business when their mortgage mess is still being cleared up and litigation continues. But, what happens when the housing sector turns up and homeowners see that rates are about to climb and rush to refinance? With rising mortgage rates their profits will expand then where will be the talk of closing this loss business down? The housing sector was up sharply yesterday.

The real money to be made in the market is not to dwell on what has happened but what is happening now and what will happen in the future.

18 Oct 2012, 06:39 AM Reply Like

msphar Comments (132)

I was really impressed (not) by the analyst firm UBS that raised their estimate from $8 to $9.5 this morning (Oct 18th at 9 AM EDT).

Stock is trading above 9.5 as I type this...less than three hours later.

Now what UBS ?

18 Oct 2012, 11:50 AM Reply Like

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