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Bank Of America Needs $34B In Capital

May 6, 2009

Something just doesn’t seem right here.  I really should take some time to review these financial statements.  I guess only time will tell other then the cash infusion which will fleece us all with inflation I still think somehow us taxpayers are getting fleeced by Obama, Bush and Wall Street.

According to New York Times and Wall Street Journal reports, the government is expected to announce Thursday that the Charlotte, N.C.-based bank needs $34 billion in capital based on the results of its “stress tests” on 19 of the nation’s largest financial firms. The New York Times quoted a bank executive, while the Journal report cited unnamed people familiar with the situation.

The stress tests are being used to determine how banks would fare if economic conditions worsened. Any banks that are deemed to need more capital based on potential future losses will be required to address the capital situation immediately, to ensure they have the necessary protection if the economy worsens.

Banks will have an opportunity to raise the funds on their own before the government steps in to help support them.

For Bank of America, the $34 billion shortfall could be covered in multiple ways, including converting into common stock a portion of a $45 billion investment it received from the government as part of the Troubled Asset Relief Program. Bank of America has been among the hardest hit banks by the credit crisis and ongoing recession.

via Bank Of America Needs $34B In Capital ~ The Huffington Post.

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3 Comments leave one →
  1. May 6, 2009 11:01 pm

    Something’s definitely not right. These tests are ridiculous, worst case scenarios that are unlikely to occur. This is all a ruse to keep the federal strings attached to these institutions so Obama can do his puppet show and say he saved the economy (and then force them to make bad loans to key constituencies down the road, such as his moves with the UAW and the Chrysler secured bondholders).

    (That’s my cynical view, anyway)

    • May 7, 2009 12:30 am

      Yes, I agree. I wish I had the time to actually dive into their financials. However, they’re probably so darn screwy even I couldn’t make heads or tails of them (scary for somebody of my type to say). And as I stay away from the financial sector for investing purposes anyways the cost/benefit to looking at those financials is nill. I’d much reather ready the notes to the financial statements of a company I’m actually considering as an investment.

      Although I suppose as a tax payer I’m already invested in the company I have a right to know what is going on but I doubt their is a chance us tax payers will see that money again anyways. As long as they are on the government’s hook then there they’ll stay.

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