For those curious why many people are scratching their heads how the market cap of Bank of America has nearly doubled in the past year, here it is: "Bank of America Corp. has amassed $64 billion of mortgages that are at least six months delinquent and have yet to enter foreclosure, more than twice the amount held by its four largest competitors combined." $64 billion is more than half the market cap of Bank of America as of this moment.
This number in the context of the BAC market cap:
In other words, by keeping tens of billions of mortgages off the market, Bank of America is hoping to limit the supply of houses in the market, creating an artificial shortage, in the process pushing up the prices of all other house higher, and only then to start dumping its pre-foreclosure inventory to a witless housing market.
And of course, this number excludes any of the tens of billions of mortgages that are in process of discharge and full write off, as well as the tens of billions in associated Reps and Warranties legal fees, which will go from accrued to paid out status as soon as Bank of America loses the MBIA litigation.
Also, recall "Foreclosure Stuffing" aka the most obvious housing subsidy in the past 4 years? There you have it. And there are those who wonder why we are experiencing merely the fourth dead cat bounce in the housing market.
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Uh oh! ! Ink Jet Ben will inevitably have to to pump again....I'll give him one month this time before QE 5
This what they will admit to.
The accounting rules were jiggered for the banks because likely what they are reporting is 10% of the real number, something they knew they could not hide long term.
BofA should be nationalized and all its execs fed live chain saws.
No worries. Insurance will cover it.
Market cap vs. mortgages owned is so utterly meaningless I don't know how to proceed responding.
Every bank has assets worth substantially *more* than their market cap. Do you know why? Because market cap is based on things like "revenue" and "profit". I hope you guys don't ever have to make an investment decision.
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