Nationalizing Bank of America? - Mercedes-Benz Forum

LinkBack Thread Tools Display Modes
post #1 of 4 (permalink) Old 02-04-2009, 01:50 PM Thread Starter
DP's Avatar
Date registered: Aug 2002
Vehicle: 190E, 400E, SLK350
Location: Chesapeak Bay
Posts: 64,111
Mentioned: 2 Post(s)
Quoted: 983 Post(s)
Lifetime Premium Member
(Thread Starter)
Nationalizing Bank of America?

Could it happen?
NEW YORK (Reuters) - Bank of America Corp (NYSE:BAC - News) shares fell below $5 for the first time since 1990 and declined for a fifth straight day on concern the government might nationalize the largest U.S. bank and wipe out shareholders.

Shares fell 12 percent as reports persisted that spiraling losses on mortgages and corporate loans might lead to government control of the Charlotte, North Carolina lender. Bank of America and newly acquired Merrill Lynch & Co ended 2008 with $2.49 trillion of assets.

"Until we get some clarity that even the largest banks will remain in shareholder hands, this downward spiral is just going to continue," said Nancy Bush, an analyst with NAB Research.

In late afternoon trading, Bank of America shares were down 63 cents at $4.67. The cost of protecting the bank's debt against default with credit default swaps rose 0.3 of a percentage point.

According to the Charlotte Observer, Chief Executive Kenneth Lewis in a memo to employees said the bank's board "unanimously" supported Bank of America's business model last week in "the longest board meeting in anyone's memory." He also acknowledged employees' disappointment about lowered bonus payouts.

Scott Silvestri, a bank spokesman, declined to comment.

Bank of America last month posted its first quarterly loss in 17 years, and said Merrill's $15.31 billion quarterly loss was so much worse than expected that Lewis needed help from the government to complete the acquisition.

The government, which had already given Bank of America $25 billion in October under the Troubled Asset Relief Program (TARP), agreed to inject $20 billion more, and to share in losses on $118 billion of residential and commercial mortgages, derivatives and corporate debt.

"This Merrill Lynch deal has become a fiasco for Ken Lewis," said Ralph Cole, portfolio manager at Ferguson Wellman Capital Management in Portland, Oregon. "His whole reason for grabbing Merrill Lynch was getting the brokers, and what he ended up with was gigantic writedowns from the part of the business he didn't even want."

Lewis had coveted Merrill for its brokerage force, often known as the "thundering herd," and which he called the "crown jewel" of the roughly $19.4 billion takeover.

Through Tuesday, Bank of America shares had fallen 62 percent this year, compared to a 38 percent decline in the broader KBW Banks Index (Philadelphia:^BKX - News).

Shares in Citigroup Inc (NYSE:C - News), which has also received a large cash injection and a government guarantee of assets, were up as much as 10 percent at $3.82 before falling back to $3.47 in late afternoon trading.

(Reporting by Elinor Comlay; Additional reporting by Dan Wilchins; Editing by Brian Moss)
Bank of America tumbles on nationalization worries - Yahoo! Finance
DP is offline  
Sponsored Links
post #2 of 4 (permalink) Old 02-04-2009, 01:54 PM
BenzWorld Elite
FeelTheLove's Avatar
Date registered: Sep 2004
Vehicle: 83 Astral Silver 280 SL
Location: Planet Houston
Posts: 28,829
Mentioned: 0 Post(s)
Quoted: 7 Post(s)
At this point the entire banking system needs to be nationalized, simply so we can supply liquidity to the economy. All hail:

Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

-President Barack Obama, 1st Inaugural address
FeelTheLove is offline  
post #3 of 4 (permalink) Old 02-04-2009, 02:06 PM
BenzWorld Elite
mcbear's Avatar
Date registered: Apr 2004
Vehicle: E500Es
Location: The BlueGrass State
Posts: 29,579
Mentioned: 0 Post(s)
Quoted: 2 Post(s)
It would be a POSSIBILITY to nationalize for a brief time to re-instill confidence in the financial system. Right now folks see the financial taking Government money and still buying new jets, throwing big parties and kicking bonuses to the "high performers" whoever the hell they might be [I ONLY lost 249% of my department's asset value last year, where's my bonus???].

Until taxpayers see credibility they are not going to want to put in more money into stabilizing the system. And the system is not going to stabilize until more money is injected. The financial sector has acted like coke sniffing, ADHD laden frat boys, unable to come to terms with the realities of their new paradigm and unwilling to make the changes in THEIR business model to instill confidence in the average taxpayer who is now footing the bill.

The options are narrowing quickly.


Being smart is knowing the difference, in a sticky situation between a well delivered anecdote and a well delivered antidote - bear.
mcbear is offline  
post #4 of 4 (permalink) Old 02-04-2009, 02:11 PM
Brentwood MB
Posts: n/a
Mentioned: Post(s)
Quoted: Post(s)

Then we are left with the National Banking system. Temporary? I do not think there would be any going back.
Sponsored Links

  Mercedes-Benz Forum > General Mercedes-Benz Forums > Off-Topic

Quick Reply

Register Now

In order to be able to post messages on the Mercedes-Benz Forum forums, you must first register.
Please enter your desired user name, your email address and other required details in the form below.

User Name:
Please enter a password for your user account. Note that passwords are case-sensitive.


Confirm Password:
Email Address
Please enter a valid email address for yourself.

Email Address:


  • Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
    Thread Tools
    Show Printable Version Show Printable Version
    Email this Page Email this Page
    Display Modes
    Linear Mode Linear Mode

    Similar Threads
    Topic Author Forum Replies Last Post
    Bank does not want customers who make less than USD 150,000 a year, Which Bank? HSBC Jakarta Expat Off-Topic 3 04-12-2007 09:48 AM
    Bank does not want customers who make less than USD 150,000 a year, Which Bank? HSBC Jakarta Expat Off-Topic 12 04-12-2007 08:56 AM
    Bank of America new cards, SSN not needed bgoin Off-Topic 14 02-22-2007 06:25 PM
    Bank of America Sells Out, Aims to Profit from Illegal Aliens Qubes Off-Topic 10 02-16-2007 08:01 AM
    Bank of America Signature M-B Visa Card wjsVT General Mercedes-Benz 2 09-04-2006 10:02 AM

    Posting Rules  
    You may post new threads
    You may post replies
    You may not post attachments
    You may not edit your posts

    BB code is On
    Smilies are On
    [IMG] code is On
    HTML code is Off
    Trackbacks are On
    Pingbacks are On
    Refbacks are On


    Title goes here

    video goes here
    description goes here. Read Full Story
    For the best viewing experience please update your browser to Google Chrome