Bank Of America Plans To Lose An "Unknowable" Amount Of Money
Losses from the subprime meltdown are going to hurt Bank of America, but they won't say how badly. They just want investors to be prepared when the 4th quarter numbers come in, says the NYT.
Kenneth Lewis says Bank of America's fourth quarter is going to be grim. How grim? Well, he isn't talking specifics, but he did say at a Goldman Sachs conference early Wednesday that "you can certainly assume results will again be disappointing."We're not experts or anything but that sounds "bad."He also expects the bank to take bigger write-downs on collateralized loan obligations than the $3 billion that have previously been reported. How much bigger? Mr. Lewis didn't go there, either. In fact, he said the final write-down amounts were "unknowable."
BofA Chief Sees More Pain Ahead [NYT]
(Photo:zhov)
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Time to pull the string on that golden parachute!
So this means they'll just cut their checking account interest rates from 0.01% to 0.001% and increase fees for everything under the proverbial sun to make up the difference.
The ONLY thing I like about them is that you can find an ATM just about every 5 feet here in the northeast.
Golden parachute for bank CEO: millions
Amount of money lost by bank: unknowable
Knowing that your banks' customers will ultimately bear the brunt of replacing unnowable amounts of lost revenue: priceless
@IphtashuFitz: Yes! I actually have a BoA ATM in my office right now. It's about 4.5 feet away from me, and follows me when I go to the coffee stand...
In all seriousness, yes, they are EVERYWHERE!
I've previously said my piece about fixing computers for the bank and the people I dealt with... This just makes me laugh...
And sing the "I was right" song...
@IphtashuFitz: Actually, they can't really do too much considering the stiff competition in the banking industry right now. If they raise too much stuff, when the customers find out they can easily switch to their competitors.
That being said, they'll lower their CD and savings rates and make it up in other places.
Gee thats so sad.
I've given this bank 3 chances over the years and each time they've manage to foul things up.
1st as NCNB, 2nd as Nationsbank. 3rd time Bank of America.
B of A is unfortunatly the only good nationwide choice in Hartford, CT. They have ATMs everywhere.... So i use 2 other banks just to avoid B of A.
Is that picture from the West Hartford cow parade?
utter AND horns... that's one confused cow!
Closed my BoA accounts this last weekend. Felt good. Continues to feel good.
Oh come all all you boa mortgagers, pay on time!
Well if they're planning on losing an unknowable amount of money then I volunteer to take some.
@IphtashuFitz: Not necessarily true. There's no BoA or any BoA branded ATMs within a 25 block radius of my house! Guess BoA and Commerce forgot about our side of town in NYC.
Thank godness!
@Craig: The funny thing is that the money will simply be gone. Poof, vanished.
One one end money was given the the home seller, that money exists in some form.
On the other end the borrower promised to pay the bank an amount of money. That money does not exist. It is a promise that the borrower will pay but not a guarantee.
To protect them selves the banks secure the loan based on the values of the homes.
Since the values of the homes are in free fall the collateral the loans are based on are also in a sense imaginary. The home has some value but if they have to repossess the home they can only get market value.
If they can not sell a home because of weak market conditions the home becomes a liability as opposed to an asset.
Banks should in reality look at the totality of all the subprimes loans made and list that as their possible losses. Most likely in the trillions.
Makes me feel like I should cancel my BoA credit card and checking account and move it elsewhere... the only problem is every other major bank is going to see the same issues whether it's the housing thing or the credit meltdown
Bank of America didn't blink when it lost $50 million (in cancelled accounts) for arresting a guy in a branch because he asked about a fraudulent check. I wonder if a few billion will get them riled up.
"you can certainly assume results will again be disappointing."
That sums BoA up pretty well.
@nutrigm: I think you mean, "come on all you borrowers whose mortgages are pooled into a AAA-rated CDO that BOA bought way too much of, pay on time!"
BofA is not even worried about this "unknowable" amount. Just like every other bank now, they are holding onto their REOs to show a loss and get HUGE tax breaks, rather than short selling them to recoup losses. Cheeky bastards...
Hello folks, I'm a writer with the San Francisco Chronicle and would like to interview people in the Bay Area who have faced or soon will face an upward reset of an adjustable-rate mortgage. I'd like to talk on the record about how the extra money going to monthly mortgage payments affects the household budget and spending habits. If you're willing to use your real name and appear in the newspaper, e-mail me at szuckerman@sfchronicle.com. Thanks
I work for them, it's honestly hard to tell what is going to happen in the coming months. I do know we get bonuses on how well the bank performed in the last year, that will be my personel barometer. How are we going to make up those losses? Well, lets just say there are going to be "promotions" rolled out with our services for you "convenience".
*your*
Man... when will this end? =( I don't understand why all these banks approved loans on houses that people could not afford.
So is this one of those "known unknowns" that Cheney was talking about?
They can lose an unknowable amount of money... but the moment *you* owe *them* a penny they're on you like white on rice.
Not to worry--those people with credit cards and savings accounts will just have to "suck it up" and take it up the behind to make up for it.