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All Eyes On Bank Of America
Banks are again weakening midday, with all eyes on Bank of America [BAC
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What's up?
The same worry as yesterday: There is noise out of Washington that TARP II will be heavily dilutive, despite earlier reports that the Obama administration might settle on a hybrid bank approach that would involve minimal dilution.
Traders are concerned that the feds will put more money into the banks, potentially wiping out the equity shareholders, particularly of companies like Citi [C
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] and Bank of America. In the most dire of predictions, effective nationalization is also being mentioned for some.
Will this happen?
Bears have argued for months that the common equity of many big banks are worthless. That's been around for a while. But now, they are worried that the preferreds may also be suspect (a la Fannie Mae [FNM
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Also, the hope that bank earnings will stage a big recovery is being hurt by worries about increased regulation.
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Questions? Comments?
- The Nasdaq has suffered the most from the EU crisis showing there's risk in the usual tech stocks.
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- How three generations of Americans are dealing with the finances of retirement.
- Hostage to Headlines
- Facebook Analyst Reports All Over the Map
- More Fallout From the Facebook Fiasco
- Facebook and Morgan Stanley's 99 Problems
- Lousy Economic Numbers, but Stocks Hold Up
- Eurobond Talk: Good News and Bad News
- Hopes Fading for Big Announcement From EU Leaders
- European 'Crisis Tennis' Again
- Facebook IPO 'Conspiracy' Theories Abound
- OK, Facebook Is Embarrassing
Data is a real-time snapshot *Data is delayed at least 15 minutes
