Sunday, January 15, 2012

SDS Briefing for Sunday, January 15, 2012

Don't Worry: Bank Of America Can "Sell Branches In Some Parts Of The Country If It Needed To Raise Capital In An Emergency."

From the "I'm Not Making This Stuff Up Stack," Reuters reported late last week that Bank of America's leadership indicates it could sell branches and other assets if needed to raise capital "in an emergency."  Note "emergency" is their word and not mine.

Ask yourself:  Why is BoA having to reassure the Fed it can meet capital requirements if it needed to in a pinch?  We're not talking about First Community State Bank in Somewhere, Iowa.  Bank of America is the second largest bank in the U.S. by assets and fourth largest by market capitalization.  Does it concern you a bank that size is having discussions about "emergency" liquidations to meet capital requirements?  Moreover, are other banks in the same league as BoA having the same discussions with the Fed?


No Surprise Here: More QE Likely On The Way

Frequent readers of this blog will know we've been discussing the likelihood of more quantitative easing - the injection of more money into the economy - as a way to prop up the economy.  CNBC reports the make up of the Federal Reserve board will likely increase the possibility of yet another round of easing. 

If this comes to fruition, I would expect the stock markets to continue to on their recent upward trend.  However, if the volume of shares traded remains low, I would not expect the rally to last for long. 


Unemployment Rate To Rise?

That's what one official with the Federal Reserve fears.  The short article to which I've linked is good; many of the comments to the article are even better.


Don't Mess With Michael Leon Ward.

Just take my word for it.  Given what he's done, hurting you is nothing.  But if you want to know why he should be left alone, you can read about it here.  And be sure to read the comments to this article, too.

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