FDIC only guarantees up to $250k per account/person*. Are you saying that no one in those 106 banks had more than that? Are you saying that no one has a BAC account with more than that in it? Other than that nitpick, I agree with you... *More complicated than that but close enough.
FDIC is running out of funds, will have to charge banks a boatload of money to keep afloat - which will press the banks. But, the FED has given a credit line to the fdic to weather any medium sized problem... the FED has the "money tree" that creates money from thin air... The "patient" (US economy) is becoming addicted to the doctor's painkillers (the wall of liquidity that the FED is providing). When the patient gets out of the medicine there will be a lot of pain.... the longer it takes (to stop giving painkillers to the patient) the worse it is going to be the "withdraw syndrome"
Hoping for BAC to fail is like hoping to get malaria. I don't agree with the way the system is organized, but for a bank like BAC to fail is to unleash a massive world of hurt upon everyone. You have got to acknowledge this fact. FDIC would get scorched, BAC counterparties would get scorched, credit would turn to dust and all hell would break loose. I wonder about these people that pray for the worst case, it's a bit unhealthy. Unbridled pessimism and self-loathing are so 2008. Call me crazy, but I hope BAC makes it out of this mess and can clean up their balance sheet...now there's a thought.
The economy is booming folks, we are in a jobless recovery, earnings are great. Look at AMZN and MSFT going to the moon. DOW is around 10k, keeps hitting 10k every other day folks, just watch CNBC. Nothing to worry about, Obama is president. We will be ok because Christmas is coming up and there will be a huge Christmas shopping frenzy. 20% unemployment is a good thing, probably just babyboomers anyways retiring early. The dollar can only go up from these lows, which means a stronger dollar. DOW 25,000 by the end of the year.
If BAC fails, people wouldn't trust any of the smaller banks. Because if your money isn't safe in Bank of America, it's probably not going to be safe in some bank that doesn't even advertise on television, which is probably what most will think. I think BAC has already failed, many of these banks are already failed propped up banks that aren't required to show their correct balances and instead are able to hide these toxic assets. There is one of the biggest accounting schemes/frauds going on in our history right now and nobody wants to pull that curtain back and get the facts. The fact that still to this day those toxic asset fears haven't been put to rest, goes to show that they cannot prove that they are now ok. In fact the FED is allowing them to forgo paying back certain SCHEDULED payments. Something BAC did in Q3 09! Why would it need to forgo their scheduled FED payment if everything was ok? Shareholders don't seem to care, the fed doesn't seem to care, the taxpayers don't seem to care, the media doesn't seem to care. This Dutch bank failed because someone suddenly started to care and publicly called the bank out on it. The bank could have pulled back the curtain and said, look, we aren't taking agressive risks, we are fine. But no, they hoped people wouldn't care. There was then a run on that Dutch bank and it failed.
Sub0, sorry, but you are not watching CNBC in a proper way. have you failed to see Cramer YELLING at full lungs BUY BUY BUY??? Also, look at all the companies that exceeded the very high bar that were the Wall Street earnings estimates? I saw on CNBC, and they said SENSATIONAL earnings. Please correct yourlself: Dow at 45,000 at the end of the year (including the "Santa Klaus" rally that CNBC invokes to exaustion).
I apologize, Cramer should be good for another bump in the DOW, so yes 45,000 at the end of the year.