Different margin rules, black hole, penny stock vibe. And, Buffett is very well connected at the Whitehouse. Expect action soon.
Political climate not ripe for a BAC bailout. I expect they let her go under. Obama wont be seen as wall streets bitch going into the election.
Yea, because if Obama lets the biggest bank in the US with half of Americans money invested in it go under that should really make everything ok and be great for his re-election bid. Do you stop to think what a catastrophic outcome BAC going under would be? I dont think bank runs are good for getting re-elected.
They will bail out the public who held money there and let the bank go bye bye. That the populist thing to do. And Obama is all populist all the time. You offer enhanced FDIC for the victims and let the public shell go away.
If a bank can't make it with ZIRP, Mark to Fantasy and untold trillions in bailouts, then nothing will save it. Or do you think that we should repeat this "on the brink of crisis" exercise every few months, years and funnel untold more trillions down the black hole of the crumbling shadow banking system. At this late stage, we should ask ourselves, do we know what sort of catastrophic outcome should arise if we continue to "shore up" failing entities for the foreseeable future...what sort of "stealth tax" (i.e. currency debasement, lowered standard of living, ZIRP forever), if we never confront the realities of this situation and always look for the politically palatable option.
He isn't a populist. He's a rhetorical populist. He campaigns on the ready made teleprompter soundbites of "taking on the fat cat bankers" while holding the money bag open for unprecedented campaign donations from this very crowd.
I agree with you, had some higher levels of pain been taken several years ago we would have flushed some of these bad debts away already. Instead politicians act in the interest of being re-elected and not what is best for the long term stability of the system. I was just saying that the administration is backed against a wall, one outcome would be bank runs (regardless what you think if BAC goes under than no one will feel safe in any bank and the result of a electronic run on the bank will be frightening. Let's not forget during the great depression people had to stand in line to get their money, now we can go online and take it out). I don't get why BAC doesnt section off countrywide and bankrupt them and just be left with Merrill to worry about. I also don't get how the government will let them go under being that they wanted out of the Merrill deal and they were forced to go through with it to keep it from all collapsing. If they did the gov't a favor you would think that they would be taken care of. I guess time will tell how this debacle shakes out.
I recently predicted that BAC will go bust in 2012. After all, it is the depository for the worst mortgage securities. I think the banking cabal will let them sink and then buy up the pieces, similar to Wamu.