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ZeroHedge cuts through BofA's (BAC) "accountant fudge heaven" in its Q1s, which is apparently...

ZeroHedge cuts through BofA's (BAC) "accountant fudge heaven" in its Q1s, which is apparently bamboozling even analysts, to declare that only three things matter: 1) The approaching refi cliff, in terms of tens of billions in maturities; 2) sliding sales and trading revenues; 3) reserve release gimmicks. Shares are -0.3% after being higher earlier.
Comments (20)
  • jwbrewer
    , contributor
    Comments (317) | Send Message
    Don't tell bbro.
    19 Apr 2012, 10:07 AM Reply Like
  • bbro
    , contributor
    Comments (9322) | Send Message
    Read 2 years worth of 10q's...challenge yourself....or rely on ZH for
    all your analysis....look at BAC bonds or the preferred's...don't care much for
    the stock...rather take a flyer on Citi stock...
    19 Apr 2012, 11:23 AM Reply Like
  • Lakeaffect
    , contributor
    Comments (973) | Send Message
    There is a museum in Wisconsin called "The House on the Rock". Reading through a bank 10K these days reminds me of how I felt when I visited that museum.
    19 Apr 2012, 01:39 PM Reply Like
  • youngman442002
    , contributor
    Comments (5131) | Send Message
    It is amazing all the banks earnings are just accountant gimmicks....and why are they allowed....
    19 Apr 2012, 10:09 AM Reply Like
  • Conventional Wisdumb
    , contributor
    Comments (1802) | Send Message
    "Mark to Imagination" accounting.
    19 Apr 2012, 10:12 AM Reply Like
  • 7footMoose
    , contributor
    Comments (2266) | Send Message
    I would add one more concern, the huge revenue decline.
    19 Apr 2012, 11:49 AM Reply Like
  • M2012
    , contributor
    Comment (1) | Send Message
    long gone are the days of integrity in business. the current "nanny-state" causes people to swoon at even the smallest sign of bad news. there is no utopian way to keep things positive all the time - it will just lead to a larger crash. deliver the pain and let people deal with it.
    19 Apr 2012, 11:52 AM Reply Like
  • mweaver
    , contributor
    Comments (201) | Send Message
    revenue flat to down. still a long way to go on
    bad mortgage paper.
    what percentage of "earnings"
    attributable to merrill lynch?
    19 Apr 2012, 11:53 AM Reply Like
  • joker
    , contributor
    Comments (102) | Send Message
    This guy does not understand a thing! Totally crap. Why I receive crap like this in email?
    19 Apr 2012, 12:17 PM Reply Like
  • IgnisFatuus
    , contributor
    Comments (2115) | Send Message
    <Why I receive crap like this in email?>
    Could be because you opted in on receiving email alerts for BAC???
    19 Apr 2012, 01:06 PM Reply Like
  • winningtrader
    , contributor
    Comments (2476) | Send Message
    BAC is in trouble in my opinion. They rely on the investment bank for earning and this year that is not going to happen, unless the FED does QE3 sooner rather than later and tells BAC in advance. Nobody knows what toxic deals they have on their books and how they value them. I wouldn't touch that one with a 10'' pole.
    19 Apr 2012, 02:03 PM Reply Like
  • User241885/(FAMCO)
    , contributor
    Comments (240) | Send Message
    Agree with winningtrader that BAC is in trouble and actually has been for some time. Since the Countrywide acquisition was announced in 2007, there has been so much malfeasance under Ken Lewis that Brian Moynihan has none of the needed resources to turn it around, unless you include financial legerdemain as an asset.


    My only disagreement is that the 10 foot pole is many feet too short.


    19 Apr 2012, 02:47 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8157) | Send Message
    Around Christmas it was said BAC would be gone by now.


    People just can't wait to kill off arguably one of the most important corporations in America.
    19 Apr 2012, 03:32 PM Reply Like
  • Conventional Wisdumb
    , contributor
    Comments (1802) | Send Message


    That's the problem with BAC, it is TBTF and the whole TARP episode is set to repeat itself in the future.


    It is nowhere near as strong as portrayed and what is propping it up is the implicit assumption of a government guarantee.


    I don't think there is an easy or simple answer to how to solve the problem but I think we have just papered it over (pun intended).
    19 Apr 2012, 03:40 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2482) | Send Message
    Under Basel I rules, BAC has a 10.78% Tier 1 ratio, compared to JPM's 10.4%. BAC is clearly a weaker brand and in a worse position, but they have enough cash to whether their situation. BAC isnt going anywhere.
    19 Apr 2012, 11:21 PM Reply Like
  • Conventional Wisdumb
    , contributor
    Comments (1802) | Send Message


    Suspension of mark to market means that it is very difficult if not impossible to know how much of that capital is real.


    Recall that Dexia was the strongest bank in Europe based upon Tier 1 capital just a couple of months before it was nationalized.

    Oct 2011
    How did Europe's bank stress tests give Dexia a clean bill of health?
    Dexia, the deeply troubled Franco-Belgian bank, passed the European Banking Authority's stress tests just three months ago


    "Why? Well under the "shocks" imposed by the EBA its core tier one capital ratio would fall to 10.4% by 2012 from 12.1%, its actual ratio at the end of 2010. An easy pass."
    20 Apr 2012, 11:39 AM Reply Like
  • Mike Maher
    , contributor
    Comments (2482) | Send Message
    The ECB stress tests were jokes, everyone passed.
    22 Apr 2012, 04:47 PM Reply Like
  • genomegk
    , contributor
    Comments (442) | Send Message
    Nothing implicit about the government guarantee. Tood/Frank authorizes the Fed to extend a 4 trillion dollar line of credit after nothing more than a back room meeting.


    TBTF is now the law of the land and surely the Fed must now qualify as a fourth branch of government.
    19 Apr 2012, 04:02 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8157) | Send Message
    Is the Fed even a government agency?


    Also note this:


    No corporation with at least $1 trillion of assets has ever gone bankrupt.
    28 Apr 2012, 03:30 PM Reply Like
  • genomegk
    , contributor
    Comments (442) | Send Message
    "Is the Fed even a government agency?"


    The Fed is unelected and is not subject to the checks and balances that the three branches established by the Constitution impose on each other. Yet the power of the Fed (+ Treasury) approaches co-equal.
    29 Apr 2012, 09:25 AM Reply Like
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