rmenton

BofA Following Citigroup to $5 or Lower

Banking system insolvent?? Heck, the whole country is insolvent. Soon, we are going to be sporting a 10 trillion dollar debt, granted, recent borrowings at depression rates. Nevertheless, we keep focusing on the banks not lending. Well, there is a good reason for it. There isn't anybody out there that needs money with the balance sheet to borrow it in a sane credit market, and even if you have the balance sheet, you wouldn't need the money. Are companies expanding? Duh. The only thing that is going to sort this out is time. Time to service the unholy loan balance, without taking on any more credit, at every level in the economy. It doesn't help matters when the government is tossing around billions like nickels, giving the impression that what a household should do is stop making payments so we can speed up their chances at a class bailout. Ken Lewis put his shareholders all in with the acquisition of Merrill. They won't see their money for 5 years, and a divdend that will unlikely see 10 cents for as long.