This made me vomit

**huckbucket** · 04-01-2012, 08:10 PM

More vomit inducing goodness from Matt Taibbi

Bank of America

We're so fucked.

Hugh Conway · 04-01-2012, 08:21 PM

Youve got some serious class envy

**huckbucket** · 04-01-2012, 08:27 PM

And you've got some serious retard in you. What's your point?

**4matic** · 04-01-2012, 09:08 PM

The article is conjecture. If the stock continues to rally (more than double the article reference) while they continue to clean up the bad debts BAC will survive very well.

The one thing I do agree with in the article is that the good name of BAC was prostituted by the folks in NC.

**BmillsSkier** · 04-01-2012, 09:11 PM

^^^

Is this the new East Coast - West Coast rivalry?

**huckbucket** · 04-01-2012, 09:14 PM

Hmmm ... nothing about how their practices have fucked over the average American?

Hugh Conway · 04-01-2012, 09:18 PM

Originally Posted by huckbucket

Hmmm ... nothing about how their practices have fucked over the average American?

that's the financial sector. full stop. but I'm a retard, so carry on, retard.

**stuckathuntermtn** · 04-01-2012, 09:27 PM

Originally Posted by 4matic

The article is conjecture. If the stock continues to rally (more than double the article reference) while they continue to clean up the bad debts BAC will survive very well.

The one thing I do agree with in the article is that the good name of BAC was prostituted by the folks in NC.

How does their stock price make them able to clean up debt? (serious question) You mean they will be able to borrow more money to pay off other stuff? Didn't read the article, I'm just stumped by your comment.

**wooley12** · 04-01-2012, 09:28 PM

Am I stupid? The "Financial Sector" has nothing to do with my personal welfare? No, I'm not stupid. BAC is another symptom of our death by greed (human nature) allowed to continue unfettered.

**4matic** · 04-01-2012, 09:32 PM

Originally Posted by stuckathuntermtn

How does their stock price make them able to clean up debt? (serious question) You mean they will be able to borrow more money to pay off other stuff? Didn't read the article, I'm just stumped by your comment.

Yes. Higher stock price improves their debt equity ratio which gets better with passage of time anyway at this point (Warren Buffett knows that). That's what happened in the 2008 crash. The financials lost so much equity value they could no longer meet the minimum debt/equity requirements.

**stuckathuntermtn** · 04-01-2012, 10:00 PM

^^^oh good, more leveraging!!!

Ok, I just read a page and a half, and while I appreciated the writing style and new take on the issue (The whole thinking with your penis thing. It's so American.) what I read was not news.

So I hope you all held your lunch down.

oh yeah, if I'm not mistaken, the bundling of mortgages that you bought or lent into securities that you sell would have been illegal under Glass Stegal, right? Or some law. I'm pretty sure the legal shit that these companies did used to be illegal. The rest of it was outright fraud.

**4matic** · 04-01-2012, 11:18 PM

Originally Posted by stuckathuntermtn

^^^oh good, more leveraging!!!
.

Higher equity price means less leverage and boa has been de leveraging for years now. Downside of that is lower earnings.

http://ycharts.com/companies/BAC/debt_equity_ratio

**ass-to-mouth** · 04-02-2012, 09:38 AM

Don't worry. Ben Shalom will save us all.

**wooley12** · 04-02-2012, 09:43 AM

Well........

Click image for larger version.

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**Chugachjed** · 04-02-2012, 11:27 AM

What can be done about it? Nothing? Well then carry on, thank you unlimited political donations.

**OSECS** · 04-02-2012, 11:29 AM

Originally Posted by Chugachjed

What can be done about it? Nothing? Well then carry on, thank you unlimited political donations.

I'm waiting for SCOTUS to deem unlimited political donations people just like corporations.

**Chugachjed** · 04-02-2012, 11:31 AM

All hail the conservitard interpretation of the 14th amendment!

**HankScorpio** · 04-02-2012, 11:46 AM

Originally Posted by huckbucket

More vomit inducing goodness from Matt Taibbi

Bank of America

We're so fucked.

I'm with you. BoA if an evil soulless corporation that just wants to screw Americans out of money. They'll never get a dime out of me.

**ass-to-mouth** · 04-02-2012, 12:01 PM

Originally Posted by VTsession

They'll never get a dime out of me.

LOL...sucker

**4matic** · 04-02-2012, 12:08 PM

Originally Posted by VTsession

They'll never get a dime out of me.

BAC buys mortgage and installment loans in the open market. You may end up with financing from BAC whether you choose to or not.

Hugh Conway · 04-02-2012, 12:13 PM

Originally Posted by 4matic

BAC buys mortgage and installment loans in the open market. You may end up with financing from BAC whether you choose to or not.

and then you can deal with BACs extreme incompetence through no fault of your own!

USBank is another set of nincompops circling the drain

**retirwntm** · 04-02-2012, 02:42 PM

Originally Posted by 4matic

Yes. Higher stock price improves their debt equity ratio which gets better with passage of time anyway at this point (Warren Buffett knows that). That's what happened in the 2008 crash. The financials lost so much equity value they could no longer meet the minimum debt/equity requirements.

this is just plain WRONG. eq amounts are calc'ed using (BS =balance sheet) book value not market value for leverage ratios. higher priced stock could in theory make the co. want to issue more equity which could change overall leverage once the company had the proceeds.

higher stock price does improve market cap and certainly indicate better financial strength in general.

another funny and interesting read from taibbi. he is like the benny profane of rolling stone or benny is the matt taibbi of TGR or something like that.

wait, matt = benny?

**4matic** · 04-02-2012, 03:04 PM

Originally Posted by mtnwriter

this is just plain WRONG. eq amounts are calc'ed using (BS =balance sheet) book value not market value for leverage ratios. higher priced stock could in theory make the co. want to issue more equity which could change overall leverage once the company had the proceeds.

higher stock price does improve market cap and certainly indicate better financial strength in general.

I don't believe I'm wrong. Banks like Wachovia we're forced into merger/acquisition when their equity price dropped as their capital ratio was based on the equity price. This is also why the Fed had to give money and forced some institutions to take money to bolster balance sheets based on volatile equity price.

http://www.investopedia.com/terms/d/...#axzz1qv1JOrTD

**Missing Sock** · 04-02-2012, 03:25 PM

Originally Posted by 4matic

I don't believe I'm wrong. Banks like Wachovia we're forced into merger/acquisition when their equity price dropped as their capital ratio was based on the equity price. This is also why the Fed had to give money and forced some institutions to take money to bolster balance sheets based on volatile equity price.

http://www.investopedia.com/terms/d/...#axzz1qv1JOrTD

Shareholders equity is a balance sheet measurement that doesn't have anything to do with market capitalization.

Assets = Liabilities + shareholders equity. When marked to market it turned out that positions the banks were carrying as assets were worth only a fraction of the carrying value. This led to significant losses on the income statement that end up subtracting from retained earnings and decreasing shareholders equity. That is where the equity value issues arose from.

**gh444** · 04-02-2012, 03:27 PM

Originally Posted by mtnwriter

this is just plain WRONG. eq amounts are calc'ed using (BS =balance sheet) book value not market value for leverage ratios. higher priced stock could in theory make the co. want to issue more equity which could change overall leverage once the company had the proceeds.

It's not theory, it is extremely easy to make your book value go up if your market value rises.