Chillin' out till it needs to be funded
Bank of America continued in the stratosphere of best performing stocks for the 12 th week running this Monday as it climbed the ubiquitous 19 cents a day ladder to land up at the phenomenal mark.
The bank was trading below $5 for an extended period in 2011 when State Attorney Generals were nowhere near agreement with the banks, profits were costly apparitions in the middle of a customer desert storm and the 1001 nights had barely begun 3 years after the crisis dawned on Wash Mutual and Lehman Bros, Bank of America, it would like to belive caught in a double rescue act with Countrywide costing it its brand name in gold wrenching it to the status of a lawless war mongerer in more states than it would like to admit, Merrill Lynch merger facing people trouble and the trading business causing a big red spot where its profits from retail banking should have shone even without the $5 account fee and now the tiered model of engagement pricing as it crossed the rubicon on the Consumer Finance Protection Bureau, the Durbin amendment and a few other costs as also presentation unhappiness with Moynihan not making the case for America’s heritage bank lucid to either the lawmakers or the investors, a couple of hedge fund casualties its “achievement ” of 2011 with Paulson and Berkowitz owing their lost pot of gold to the bank’ s sterling European and Pan american performance.
It was hard to believe this bank was four times bigger than Chase in California or that its saga of corporate takeovers from coast to coast all of which hasd merged relatively seamlessly including FleetBoston on the East Coast and MBNA cards which it is still unloading outside the USA though it has runoffs in line since then.
The stock has taken three months to double from the day Paulson exited on fears of it receding into pennies and deigned to recede into oblivion after it was asked to become the Blue Bells Ice cream of America and drop any choices of Svensen and HAagen Daaz from its portfolio, went dividendless and even started selling off Pizza Hut franchises it did not tell anyone but owned outright in half of America
Even as I am snowed under imaginary totem poles sullying my analysis time, WSJ lists the investors who went for the rollaer coaster ride at the right time, headied by the only Warren Buffet ( apparently not needing to confer with his successor on this one ) who bought warrantsstrike at $7.14 worth $5 bln, and Eton Park Capital from one of the many leaving Goldmans sachs, Deutsche Bank and others on Wall Street, who bought up 10 fold his original investment at the November/December bargain price to 20 mln shares even as Keith horowitz and the analysts at JP Morgan capped the rally in BofA early in 2012, and Berkowitz hung on to 104 mln hsares in his portfoli o yet sold almost a million of those in November when Sears shut him down for a few days..John McDonald almost hit the big time in 2011 but decided to follow Citi analysts into downgrading BofA earlier and we just held back knowing there was no case either way for an upgrade or a downgrade as the mortgage markets seesawed midway thru a statistical cornucopia of recovery data since December.
Bank of America has already provided for $34 nbln in losses from litigation and is the most struck party in the Mortgage settlement struck in 49 states payin gout $17 bln and more in reduced principal’s increased for the bank in a side parley by the Obama administration and the State Attorney Generals in return for an easier life in pursuing other litigation against the bank post the settlement