More losses at Bank of America. How unusual.
The only bottom we are seeing is the bottom of the barrel which we as a nation are scraping to maintain an unsustainable economy burdened by parasitical corporations that is on its last legs. Anyone who does not 'get this' by now is sucking hard on the bong pipe of government and Wall Street propaganda.
"``Based on information I see,'' it will take at least a year before all losses are realized, and some financial institutions may fail, Rubenstein said at a breakfast meeting of the Institute for Education Public Policy Roundtable in Washington. He didn't name any companies."
Banks Have ENORMOUS Unrecognized Losses - Carlyle Group's Rubinstein
It appears that the banks are recognizing their losses at the rate at which the Fed can monetize them while hiding the effects on the broader economy. They are manipulating economic indicators and information in the process.
The issue in this web of deceit 'for our own good' is that some are being set up for serious personal losses while a privileged few insiders are being set up for enormous personal gains. It is happening now. It is integral to the process of inequality and croney capitalism.
THAT is the moral hazard with having a centrally controlled economy, under the command of "benevolent economists," that liberal academic economists seem to fantasize about so often at times like these. Power corrupts. Integrity is not incidental to good governance. These fellows need to go back and learn the lessons of the schoolyard. The rule of law matters, because after you have knocked it down, you may not stand up easily in the cold winds that will blow unimpeded after it has gone.
Bank of America Sees Higher Losses on Home Equity
By David Mildenberg
May 13 (Bloomberg) -- Bank of America Corp., the second- biggest U.S. bank, widened its forecast of home-equity loan losses beyond projections offered last month, adding to evidence that more consumers are falling behind on the debts.
The bank expects losses to top 2.5 percent of its $118 billion in loans linked to home values, Liam McGee, president of the Charlotte, North Carolina-based company's consumer and small business division, said at a conference in New York sponsored by UBS AG. The bank previously projected a loss rate of between 2 percent and 2.5 percent.
Bank of America, the nation's largest credit-card issuer, is also seeing a ``recent sharp increase'' in spending on necessities by its credit-card customers. That has curbed retail, travel and entertainment purchases, McGee said. Economists and bankers have said the economy may be teetering near a recession as consumers struggle with job losses and gasoline prices topping $4 a gallon.
McGee said Bank of America expects the economy, measured by real gross domestic product, will shrink in the second quarter. The bank had $184 billion of credit card debt outstanding at the end of the first quarter and about a 20 percent market share.
The bank's $4 billion purchase of Countrywide Financial Corp., the largest U.S. home lender, remains ``on track'' to be completed in the third quarter, McGee said. Bank of America expected ``bumps on the road'' during the transaction, he said.
``There is a lot of talent there that will help us grow our business,'' he said, noting that home lending will join consumer deposits and credit cards as key businesses for Bank of America.
To contact the reporter on this story: David Mildenberg in Charlotte at dmildenberg@bloomberg.net
Last Updated: May 13, 2008 09:16 EDT
