You may remember back in 2007, the Federal Reserve changed the rules and allowed some banks to use a greater amount of money borrowed from the discount window to help their brokerage affiliates. In fact, this amount was 25 billion for Bank of Amerika. The Fed also began accepting more risky assets as collateral, with Bank of Amerika participating. Mish had a good article about it here: Now We Know Who and Why.
On Monday, July 21st, Bank of Amerika was one of 18 other banks on the SEC’s list for restricted short sales. Presumably, this was done so that the share prices would rise and allow the banks access to capital at better rates. Or, they were truly in danger of IndyMacing, and the SEC wanted to prevent another collapse.
Bank of Amerika reported earnings on the same day of 3.41 billion.
Today, Bank of Amerika announces a 3.75 billion stock repurchase plan.
I have to ask, what the fuck country am I living in?
Pinky Paulson and Helicopter Ben have allowed Bank of Amerika to borrow my money and yours, with no risk premium, so they could prop up their own brokerage affiliates. The SEC has changed the rules to provide Bank of Amerika cash for their risky assets, and protection from short sellers. And now, it appears that Bank of Amerika is doing quite well, and has simply used my money and yours, with no premium, to the benefit of the corporation and their large investors.
I am so pissed off at this fuckery, I am unable to coherently express myself. I am left with the distinct feeling that our government is from Mars. I am also left with a good understanding of why so many Americans do not trust corporations, CEOs, and “the rich.”
So much for free market capitalism
America’s chickens are coming home… to roost.
Wood,
Banks are notoriously difficult to analyse accurately. In regards to BAC, they sold Convertible Preferred shares also in addition to huge reserving for potential/actual losses.
If those potential losses are now ameliorating, they may feel that the capital raised is in excess of requirement, and it would be prudent at current prices to add to the treasury for potential converts from the Preferred in the future.
Also, with the siphoning off of Countrywides debt holders, the capital may have been raised in anticipation of restoring to Par those holders. As this currently is not the case, again, makes sense to *invest* in their own common stock.
jog on
duc
The question is, how much of this announcement is for show(pump the stock price) and how much will they ultimately repurchase.
If you are pissed, and you should be if you have working gray matter, go sign Denningers petition.
http://market-ticker.denninger.net/archives/525-RED-ALERT-RAPE-BY-CONGRESS-IMMINENT.html
i have had it – enough is enough.
fuck america.
What type of county do are we living in?
I believe a facist one – big business and big government in bed with each other. I think that pretty much sums up what is going on right now.
Another quote I read somewhere was a good description – “Companies are now privatizing profits in the ‘free markets’ but socializing the losses.”
Here is another description from Gary Kaltbaum that I appreciated.
“”Lets stop the speculators from bidding up oil…but let’s also stop the speculators from bidding down the financials.”
Read that last line twice… maybe three times. Are we now in a world where if the scum that ran the financial companies into the ground are not happy with the way an investment is going, you just lobby the government and entrust the regulators to fix it? Why aren’t the regulators now going after the speculators that lifted the financials this week as well as the speculators who sold the oil this week? Oh yeah, because that does not suit their purpose. That does not fit their agenda. The agenda is to have financial stocks go up and oil prices go down. Forget free markets. Let’s plug the markets up with our scare tactic rhetoric and “new” regulations. Ladies and gentlemen, this is the mother of all market manipulations… brought to you by so-called free market people. But it is only a free market for them when things are going right for them. When things are going wrong for them, pull out the hammer and blame others. Use your bully pulpit to socialize your losses. Why aren’t the free market people yelling and screaming about this? Why isn’t anyone lambasting the people at Goldman Sachs? After all, last year, they shorted the hell out of the mortgage market while they were selling mortgage products. Where were the regulators on Friday when someone floated a rumor that FCX would be bought by RIO? FCX ramped 9 points in minutes. Why aren’t these people beside themselves over this blatant attempt to pop a stock to the upside? When I told you last year about the “rumors of the day” during the private equity (leverage buyout) boom… and stocks were lifted out of nowhere… why didn’t anyone complain then? Again… because it does not fit the agenda. So… let me get this straight, when these people do not like which way a certain investment is going, are they just going to talk it and regulate it the way they want? Is this what we will be dealing with going forward? Is anyone not teed off about this?
I do not recognize the market world I am living in… a world of total and unadulterated hypocrisy. A world where business people who made billions and billions of dollars because of free markets… now want manipulated and government controlled markets because of the bad bets they made. This is disgusting, and for anyone that is a free market proponent, it is a wake-up call that none of us has any control of. This is no longer crony capitalism – this is crony socialism. We can rant, we can yell, we can scream, but no one is listening because the guilty are being propped up by their friends… and it is not even hidden anymore. It is self evident for all of us to see, but supposedly, for the greater good, these too-big-to-fail companies have to be saved. In my world, if you make bad bets, you lose and if need be, you go out of business and let someone else come to fill the void of your stupidity. In the world we are watching, you can hide losses just like ENRON and not be called an ENRON. In this world, you can commit fraud and run Fannie Mae (FNM | Quote | Chart | News | PowerRating) into the ground, take tens of millions in salaries… and get no comeuppance. In this world, you can run major financials institutions into the ground and still leave with hundreds of millions in pay packages. In this world, you can do all this and then be asked to be on the committee to fix the problems you created. The Wall Street Journal said it best this weekend with the article titled Why No Outrage! Why? Because everyone is well connected. In a nutshell, the people that caused the problem, oversaw the problem, were supposed to regulate the problem, enabled the problem, did nothing about the problem… and are now the ones to come up with the solution to the problem!”
I thought that was very well written by Mr. Kaltbaum.
The real problem is by in large America is a stupid country who care more about what Brad and Angelina are going to name their baby than they do about what their government is doing to screw them. I can’t tell you one person I know personally that can tell me what the Federal Reserve does. To be honest, until a few years ago, I didn’t know either. Education is the key. Unfortunately, you are not going to hear about these things on the mainstream media. Let’s just hope more people will learn about what’s going on and things can change soon and get America back to what she is supposed to be. My guess is that the Founding Fathers are rolling over in their graves.
i thought i was the only one who noticed that weird shit. Also whats up with the watch? Guys bro made 4 Bil last year, think he could afford a nice Patek or something
MAC, Gary K, is the worst trader of all time. he sucks. he’s a fat, gay, Keith Hernandez look alike who couldn’t hit a good stock if it was put in his portfolio. The fact that you are quoting him tells me that you suck as a trader and should kill yourself immediately. in fact, i am wishing cancer on you as we speak just for making me remember that sweaty slobs fat face from bulls & bears. You owe everyone on this site an apology for bringing his name up.
So in summary, Gary K sucks and is fat slob. You will apologize and then die of cancer.
kaygr8thnxbye.
Well, I am sure that you are a better trader than Gary K or myself – you’re probably better than most traders on this site – but thanks for the kind words anyway. I am sure Gary appreciates them as well. It’s funny though, the quote (or this whole post) had nothing to do with trading.
You seem like a very nice person. Best of luck with your trading. I am sure you will be very successful.
Mac, that was a classy answer, good for you. I’ve read your site occasionally too.
Thanks Boca. There are idiots everywhere, but that doesn’t mean you or I have to be one too.
mac-
dammit, i hit the wrong karma button, sorry
your post was A++, as was your response to mr wonderful
Good post, as usual Woodrow.
Yesterday I speculated that this buyback would screw SKF. But it’s doing very well today.
Maybe Bernie & Blinky’s fuckery has been figured out and discounted.
Wood … your fave, Monsieur Mortgage, posts Ronald Paul talking about this very subject.
http://mrmortgage.ml-implode.com/2008/07/24/new-ron-paul-video-on-the-housingbank-bailout/
Mac,
Gary sucks. There is no debate here. Trying to support that fat chum buckets trading abilities is like trying to argue that the world is flat.
If that fat pig is so good, ask him some basic questions:
1) fatso what is your w/l ratio. don’t tell me “I win plenty’ tell me percentages.
2) when you fat ass is done sweating gary, what did your firm do last year? You may not use terms like, “we made plenty of money” WTF is that shit – were you up? yes or no? if up, how much. and don’t give me any relative to the s&p or any other bullshit neither.
3) how long do you hold a stock for? I bet no more than 3.5 minutes.
Now Mac, before the Big Casino gets you, ask him these basic questions that any money manager should be able to answer without stuttering, stammering, sweating or stuffing pizza into his mouth to obscure the answer.
Gary sucks. you suck for supporting gary. the posters here that support you? they suck too. The woodshedder sucks for allowing any posts with that fat knobgobblins name. the fly sucks for letting the woodshedder let this weak ass shit slip. the web sucks for posting sites like the flys that spread that mustachioed meatballs name and help him earn undeserved money. god himself fucking knows he cant make it trading.
gary is like cramer. only fat with a bad mustache.
PS Boca and nullpointer are definately gay lovers based on their fairy like responses. I bet every Sunday they sit around in their bathrobes. Null cooking Boca some eggs and toast while that homo reads the new york times arts and leisure section, drinking some shitty sbux coffee and discusses how vile the internet has become.
Dude, get over it. I don’t think anything I posted had anything to do with trading. I didn’t mention anything about Gary K other than that he wrote the post. I really don’t know what type of trader he is, other than I am sure you are better.
Anyway, you sound like a very happy, normal, level-headed person. I am sure that calm and collected personality helps you tremendously as a trader. Best of luck trading, although I am sure you don’t need it.
Manboobs, Dude, you’re shit is somewhat funny. Don’t ruin it with careless reading comprehension.
Boca is one of our very few (Only??) women participants here. Please do not chase her off.
TIA,
Jake.
Speaking of Boca, check out that NLY action today.
Schwing!
__
Boca you’re a chick? Are you old and grizzled or young and tight? If young, what are you wearing? tell me slooowwllly….
HAHAHA! Now that’s some funny shit. Thanks Jake, I guess he wasn’t clear on the concept that I’m female. But …. I sure wouldn’t mind if somebody (nullpointer, or anybody) made me breakfast around here, complete with the Sunday NY Times.
I suspect “manly men” type traders don’t like Starbucks coffee, but I do. I’m just too cheap to go out and get it when I can make my own just as good.
Manboobs, I have no idea who “Gary” is, I just thought you were being somewhat rude to Woodshedder and Mac. They’re quite hospitable on this site, so chill and enjoy the company.
Manboobs, I’m married to a bigger man than you’ll ever be. Probably richer and and better armed too.
Boca,
I never said a thing about woodshedder. I agree with his post. If I agree with him, that means he is smart. If he is smart than that is all one needs in life. I did mention something about Mac getting the Big Charlie and I vaguely recall going on a tirade about Gary kaltbaums terrible trading. It’s a bit fuzzy, but there was a request for a detailed step by step of you undressing after I found out that you were a chick. I don’t know, it was like 2 red bulls, 5 blogs and 10 posts ago. how is a man like me supposed to keep track?
Your husband is not better armed than me though. Do you think someone with my attitude goes through life without having enough ammo to fend off the hordes of those he offends?
At least you’re realistic about the need for weapons.
I only mentioned Woodshedder because this thread is in his section of ibankcoin, and since he is quite a nice person, I treat him with respect.
Now, can we have a truce?
Truce we are friends now. Can I still get that step by step on the undress? what’s some dirty talk ‘tween friends.
ya’ll are killin me…
fwiw, I liked Mac’s comments.
Gary Kaltbaum has mad game!