# Bank of America to go under!



## Auslad (9 August 2011)

The chart of BAC looks exactly like Lehmans before it went under. When BAC goes, expect the Dow to fall at least another 2000 points or even more!!!


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## wayneL (9 August 2011)

*America to Go Under!*

I've corrected the title /\


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## prawn_86 (9 August 2011)

Auslad said:


> The chart of BAC looks exactly like Lehmans before it went under. When BAC goes, expect the Dow to fall at least another 2000 points or even more!!!




Care to actually provide the 2 charts...??


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## ParleVouFrancois (9 August 2011)

This is why we look at fundamentals, and not charts, to tell if a company is going bankrupt or not.

JM.


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## wayneL (9 August 2011)

ParleVouFrancois said:


> This is why we look at fundamentals, and not charts, to tell if a company is going bankrupt or not.
> 
> JM.




Nonsense.

Both offer clues only. Only the story behind the story tells the real story... and events in the fullness of time.


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## wayneL (9 August 2011)

wayneL said:


> Nonsense.
> 
> Both offer clues only. Only the story behind the story tells the real story... and events in the fullness of time.




OK what I mean is that fundamental information may seriously lag reality. Technical information may sometimes "front-run" the fundamental reality.

There are numerous examples of this.


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## wayneL (9 August 2011)

PS - This is not to say that I believe BAC is going BK, but the chart (which I have not viewed) may be giving a "heads up".


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## skc (9 August 2011)

Auslad said:


> The chart of BAC looks exactly like Lehmans before it went under. When BAC goes, expect the Dow to fall at least another 2000 points or even more!!!




That seems to be as good a trigger for the next leg down as anything else...


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## baby_swallow (9 August 2011)

BofA and its buddy Citi(s-hiti)Bank has been in life support since the GFC. Thanks to Uncle Benny's money printing presses.
Between them, they hold millions of homes under water or in repossesions, not to mention non-performing business loans.....but wait.....how about those toxic CDOs
and other derivatives that been swept under the carpet.

Thats the Fundamental and its efficiently reflected on their share prices.


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## Garpal Gumnut (9 August 2011)

Post a chart mate.

gg


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## skc (9 August 2011)

BAC going bankrupt because AIG is suing them for $10B.

AIG makes history by being the only company that causes 2 financial crisis.


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## wayneL (9 August 2011)

baby_swallow said:


> BofA and its buddy Citi(s-hiti)Bank has been in life support since the GFC. Thanks to Uncle Benny's money printing presses.
> Between them, they hold millions of homes under water or in repossesions, not to mention non-performing business loans.....but wait.....how about those toxic CDOs
> and other derivatives that been swept under the carpet.
> 
> Thats the Fundamental and its efficiently reflected on their share prices.




Citi? Wha.....???

Please say it ain't so...

... not until I completely extract my last skerrick of cash :


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## Auslad (9 August 2011)

Pic of Lehmans and Pic of BAC Charts


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## Slipperz (9 August 2011)

Auslad said:


> The chart of BAC looks exactly like Lehmans before it went under. When BAC goes, expect the Dow to fall at least another 2000 points or even more!!!




The problem is the US has gone soft. There are still some issues in the marketplace that need to be adressed  :


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## Aussiejeff (10 August 2011)

Saved (for now) on the back of the massive short covering rally sweeping the world markets. Shorters had to take huge profits sooner or later. Once the short-haired herd began stampeding for the safety of the cash registers, it was on in earnest!

Don't be surprised if "economic reality" causes some serious volatility in coming days/weeks though. Plenty of cash in shorters hands now to instigate another plunge when desired....


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## nomore4s (10 August 2011)

Aussiejeff said:


> Saved (for now) on the back of the massive short covering rally sweeping the world markets. Shorters had to take huge profits sooner or later. Once the short-haired herd began stampeding for the safety of the cash registers, it was on in earnest!
> 
> Don't be surprised if "economic reality" causes some serious volatility in coming days/weeks though. Plenty of cash in shorters hands now to instigate another plunge when desired....




You should write for a tabloid newspaper with that sort of dribble.


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## skc (10 August 2011)

Aussiejeff said:


> Saved (for now) on the back of the massive short covering rally sweeping the world markets. Shorters had to take huge profits sooner or later. Once the short-haired herd began stampeding for the safety of the cash registers, it was on in earnest!
> 
> Don't be surprised if "economic reality" causes some serious volatility in coming days/weeks though. Plenty of cash in shorters hands now to instigate another plunge when desired....




It's alright. The world will ban these parasite shorters again (like Korea and Greece has done already) and the market will be all hunky dory again.

Surely share prices are only falling because people are selling..

P.S. I am extremely worried that it might actually happen - that would put my pairs trading out of business for a while


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## Aussiejeff (10 August 2011)

skc said:


> It's alright. The world will ban these parasite shorters again (*like Korea and Greece has done already*) and the market will be all hunky dory again.
> 
> Surely share prices are only falling because people are selling..
> 
> P.S. I am extremely worried that it might actually happen - that would put my pairs trading out of business for a while




Yeah, I noticed that. The old "bad shorts" are being hung out to dry - again. I also not that the Korean market is now going to be the plaything of "state run funds" who will be ordered to buy, buy, buy to help shore up equity prices. 

How frikkin' artificial a market is that?? LOL

Maybe the Yanks should follow suit and order funds (on penalty of arrest) to engage in massive buying of BofA stock! No naughty shorts, mind....


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## DB008 (10 August 2011)

I feel that there will be much more volatility coming in the next few months as they try to sort out this mess. BCA was also up 16+% today. 


The Big question is, can they sort this mess out? 

Jim Rogers says no, USA can't even pay the interest on the debt, let alone pay it off.


Bank of America




Lehman


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## Market Sniper (10 August 2011)

Just having a quick look through the thread and couldn't see any mention of the fact that Interactive Brokers use BAC in Sydney for Aussie deposits. What is the circumstance in regards to this IF BAC went down? For memory, i have read on another thread that your money is in trust, can someone confirm this?


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## Auslad (11 August 2011)

Latest Chart OF BAC. It gave up most of the prior days gains and is turning down.  The time frame for the complete collapse might be by the end of this month. When BAC goes, the whole system goes down not only in the US, but right around the world.

http://finviz.com/publish/081011/BACc1dl1757.png


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## Market Sniper (11 August 2011)

Market Sniper said:


> Just having a quick look through the thread and couldn't see any mention of the fact that Interactive Brokers use BAC in Sydney for Aussie deposits. What is the circumstance in regards to this IF BAC went down? For memory, i have read on another thread that your money is in trust, can someone confirm this?




Anyone with a comment on this?


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## skc (11 August 2011)

Market Sniper said:


> Anyone with a comment on this?




http://individuals.interactivebrokers.com/en/p.php?f=ibgStrength


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## Market Sniper (11 August 2011)

skc said:


> http://individuals.interactivebrokers.com/en/p.php?f=ibgStrength




Thanks for the link SKC.

Interesting comment within the page - "Futures, options on futures, and single stock futures are not covered, but available cash will be swept from your futures account to your securities account periodically to take advantage of SIPC and excess SIPC coverage to the greatest extent possible. As with all securities firms, this coverage provides protection against failure of a broker-dealer, not against loss of market value of securities."


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## skc (11 August 2011)

Market Sniper said:


> Thanks for the link SKC.
> 
> Interesting comment within the page - "Futures, options on futures, and single stock futures are not covered, but available cash will be swept from your futures account to your securities account periodically to take advantage of SIPC and excess SIPC coverage to the greatest extent possible. As with all securities firms, this coverage provides protection against failure of a broker-dealer, not against loss of market value of securities."




To me that means you still own your shares, but if the shares fell from $10 to $5 while the broker-dealer is broke and you have no access to sell the shares, that loss is not protected.


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## Market Sniper (11 August 2011)

skc said:


> To me that means you still own your shares, but if the shares fell from $10 to $5 while the broker-dealer is broke and you have no access to sell the shares, that loss is not protected.




Yes it does say "Your stocks, options, warrants, debt instruments, and cash -- denominated in all currencies -- are covered by this protection." But then says as stated below in regards to futures.
From what I make of that is it would be the broker of that future product if they went broke but then I dont understand how they say money would be swept from your futures account?


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## Aussiejeff (11 August 2011)

Don't worry. BofA is too big too fail. Fed can simply print whatever they need to stash in BofA's vaults. It's worked before (bottomless bailout), so why not now and forever more? Who cares about devaluing the currency or inflation? ATM I would have thought both of those things are seen by many as desirable for reducing the pain of debt?


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## drsmith (11 August 2011)

The share price of our own listed doughnut is looking a little puggy.


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## drsmith (11 August 2011)

BAC's share price is looking a bit sick.


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## Aussiejeff (12 August 2011)

drsmith said:


> BAC's share price is looking a bit sick.




The patient has recovered a bit overnight after a dose of "unexpected falls in jobless claims"

BAC UP almost *+9%* to US$7.35.

Not so sick today...raging fever has subsided for now, with just mild lingering symptoms of the pox.


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## baby_swallow (26 August 2011)

What a difference a Buffett make....
After the news that Berkshire injected $5 billion into BofA, all the indices 
went ballistic during US pre-open last night.....but only to sell off during regular trading.
BofA rocketed 24% but gave off more than half of it later...

There's an ongoing rumour that Uncle Benny might announce QE3 tonight.  
I suspect QE3 has already started. That $5 billion may be actually from the 
Fed, using Buffett to inject confidence in the markets.
With Uncle Benny so desperate and running out of ammunition,  anything can happen.


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## pixel (26 August 2011)

With Billions of $$ on the Buffett, any rumour of BAC's demise must appear greatly exaggerated.
How Greece must loathe not having a Buffett on board. Instead, she is weighed down by tycoons and heirs of tycoons who want to enjoy their Billions without sharing even a nano-cent with their compatriots. But then again - who would be willingly pay taxes in support of a lazy government when there are so many neighbours working their butts off to avoid becoming collateral damage...


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## maffu (26 August 2011)

ParleVouFrancois said:


> This is why we look at fundamentals, and not charts, to tell if a company is going bankrupt or not.
> 
> JM.




There has been plenty of discussion on the fundamentals since this post.

Here a blogger write about the problems facing Bank of America: http://www.businessinsider.com/bank-of-americas-stock-collapse-2011-8

Bank of America replied to this blog post (they blame the blogger for their collapsing share price): http://www.businessinsider.com/bank-of-america-henry-blodget-2011-8

The blogger updated his stance post the Buffet deal:
http://www.businessinsider.com/the-truth-about-bank-of-america-2011-8
He explains how Buffet looks like the only one who will gain from the deal, while regular shareholders will be left in the cold.

Very interesting stuff.
Thanks for providing the technical charts, it led me to finding some interesting fundamental information about the bank.

Edit: If you are short of time I would recommend the 3rd article as the best one to read. It has quite a few nice arguments as to why the Bank of America balance sheet might be in a lot of danger, and why the 250billion of equity they have might not be enough.


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## Tysonboss1 (26 August 2011)

baby_swallow said:


> That $5 billion may be actually from the
> Fed, using Buffett to inject confidence in the markets.




Buffet is currently sitting on about $30B.

plus he just got back the $5B he put into Goldman sachs, No doubt he is just reinvesting this $5B he has been paid back by Goldman.


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## maffu (26 August 2011)

pixel said:


> With Billions of $$ on the Buffett, any rumour of BAC's demise must appear greatly exaggerated.
> How Greece must loathe not having a Buffett on board. Instead, she is weighed down by tycoons and heirs of tycoons who want to enjoy their Billions without sharing even a nano-cent with their compatriots. But then again - who would be willingly pay taxes in support of a lazy government when there are so many neighbours working their butts off to avoid becoming collateral damage...





Warren Buffet didn't buy common stock. His deal is not representative of the plight of the ordinary common share holder.




> He bought preferred stock, which will pay him a nice 6% dividend. By holding preferred stock, he is also senior to common stock in the capital structure. So if Bank of America does have to take huge write-offs of inflated asset values in the future, Buffett and Berkshire won't get hit.
> 
> For his $5 billion, Buffett is also getting the right to buy a staggering 700 million Bank of America common shares at $7.14 a share--options that are already in the money. This represents 7% dilution to Bank of America's common stockholders.
> 
> In other words, Buffett is getting a preferred security paying 6% a year that is protected from dilution from future capital raises AND an option to buy 7% of the company--all for $5 billion.


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## joea (26 August 2011)

maffu said:


> Warren Buffet didn't buy common stock. His deal is not representative of the plight of the ordinary common share holder.




Well you have to admit he knows how to swing a deal.
joea


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## DB008 (1 October 2011)

Interesting article on the BoA

http://online.wsj.com/article/SB10001424052970204138204576600800330404330.html?mod=wsj_share_tweet


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## odds-on (4 January 2012)

Has anybody been following Bank of America over the Xmas period? There are plenty of articles on gurufocus and seekingalpha. After reading the numerous articles, i came to the conclusion that it is difficult to value Bank of America and reckon it is nigh on impossible for 99% of investors to value it. Therefore any position in Bank of America is a long term bet about whether the US government will let it fail. The strong aussie dollar and the potential upside could make it a very lucrative bet if willing to wait 5 years.

Thoughts?


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## banco (4 January 2012)

joea said:


> Well you have to admit he knows how to swing a deal.
> joea




He seems to make some of his money these days by effectively renting out his reputation.


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## chrislp (4 January 2012)

odds-on said:


> The strong aussie dollar and the potential upside could make it a very lucrative bet if willing to wait 5 years.
> 
> Thoughts?




The stronger the Aussie dollar the less luctrative return you will receive if the stock price goes higher.

Besides it's in a long term downtrend. Not worth the bet IMO; better stocks out there.


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