Bac

Discussion in 'Stocks' started by bond_trad3r, Jan 15, 2009.

  1. how do you know it will be bad for the stockholders? this isn't AIG we're talking about here, the situation is different. BAC is in a better negotiating position than AIG was
     
    #11     Jan 15, 2009
  2. In my opinion BAC is the strongest bank out there, so if they're not a bargain at 8 bucks, then the world is really on the brink of disaster. If you're going longer term, I think BAC would be a very good bet at this price, hey Warren Buffett got in in the 30s I believe.
     
    #12     Jan 16, 2009
  3. Toonces

    Toonces

    Briefing had a story last night about the government possibly backing $100-$125 billion in assets for BAC. After midnight, DJ broke a story about $20 billion in fresh capital, but there was also a headline that read 'US to backstop $118 billion in BAC assets.' So I would assume that it's the $118 billion (not the $20 billion) number we're comparing to the $100-$125 billion that was expected?
     
    #13     Jan 16, 2009
  4. belmondo

    belmondo

    how this is possible? CEO first acquire Countrywide and than MER. really cleaver decisions and now is begging for taxpayer money.
     
    #14     Jan 16, 2009
  5. As I understand it, MER's assets deteriorated much more than BAC expected, and BAC was threatening to back out of the deal. Thus the government felt it had to do something to prevent another LEH-style credit market freeze-up with LIBOR shooting through the roof again. Or something to that effect.
     
    #15     Jan 16, 2009
  6. http://www.bloomberg.com/apps/news?pid=20601087&sid=aZs1pLsWbonk&refer=home

    $20 billion invested, plus $118 billion of assets guaranteed
     
    #16     Jan 16, 2009
  7. m22au

    m22au

    term sheet at
    http://www.ustreas.gov/press/releases/reports/011508bofatermsheet.pdf

    some snippets:

    Fee / warrants equity / dilution:

    Institution will issue to USG (UST/FDIC)
    (i) $4 billion of preferred stock with an 8% dividend rate (under terms described below); and
    (ii) warrants with an aggregate
    exercise value of 10% of the total amount of preferred issued. The fee may be adjusted, as necessary, based on
    the results of an actuarial analysis of the final composition of the Pool, as required under section 102(c) of the Emergency Economic Stabilization Act of 2008.

    loss sharing:

    Institution absorbs all Eligible Losses in the Pool up to $10 billion.
    USG (UST/FDIC) will share Eligible Losses in the Pool in excess of that amount, up to $10 billion. All Eligible Losses beyond the institution’s deductible will be shared USG (90%) and institution (10%).
     
    #17     Jan 16, 2009
  8. So it says the derivatives portfolio has maximum potential future losses of $81 billion. Where can I find more detailed information about the contents of the derivatives portfolio?
     
    #18     Jan 16, 2009
  9. they're getting billions from the government because it's NEEDED. Did you see the losses mer created? 15 billion! More to come guys! Run from bac, mer/countrywide will kill this bank
     
    #19     Jan 16, 2009
  10. BOA isn't going away but it will be ahile before they clraw themselves out of this ditch
     
    #20     Jan 16, 2009