Bank of America down to 5.53 per share

[lothar]

Buffett bought preferred stock. Preferred does not work the same way as regular stock.

He will receive a 6% dividend per year, with warrants to buy 700 Million shares at $7.14, good anytime for the next 10 years. Assuming BoA doesn't fold, his investment WILL pay off. It's pretty much a no-brainer if you are confident the company won't go bankrupt.

Basically, over the next 10 years, he'll get $3B in dividends, and there is only a very small chance that the stock price will stay below 7.14 for the entire time. To be perfectly honest, I see the worst possible outcome of this deal as him just breaking even.

Moral of the Story: Warren Buffett is much smarter than you think he is, and he has the financial clout to get sweetheart deals like this.

This.

 

[TheSlamma]

Enjoy losing all your volume when they do a reverse split. There is no draw for this bank, the debt card thing will send people packing and their mortgages are either going to be forclosed/short sale or people are going to refi OUT of them into a decent bank or credit union.

 

[Wyndru]

I got laid off by them a few years back, fuck them.

 

[Darwin333]

Fucking garbage. Let me shed one fucking tear for banks having to accept lower profits. These fees were hurting merchants, especially small businesses that republicans are supposed to support. But, no, it got passed under the devil Obama's watch, so it must be evil. Spin spin spin. See how much support you can gather from anyone with half a brain for the fucking banks not making record profits this quarter.

The point is they WILL continue to make the profit. The only difference is who pays for it (directly at least). These fees don't "hurt" retailers as you say because all of them price the fees in. OTOH, removing the fees has helped the retailers because as I said the fee was already priced in and now they get to keep it.

Don't get me wrong, I love nothing more than sticking it to the big banks but this isn't really sticking it to them since they will just recoup the costs from their account holders. If people didn't flee from the TBTF banks after they robbed us blind I doubt a $5/mo fee is going to make them switch. Most other big banks are now charging for checking accounts one way or another, I personally use a credit union but I don't see a huge rush to them over this.

 

[Darwin333]

bofa is a monster, its really hard not to use them for something here on the west coast. at some point their stock is gonna come roarin back like an mfer so anyone who has no social conscience should buy them now, youll make a fortune at some point. they cant fail, the gov wont let them

The .gov can't afford to bail them out again and they are already allowed to commit accounting fraud to make their balance sheets look better than what it really is. I agree that they will try but imho they are running out of ammo.

 

[dank69]

The point is they WILL continue to make the profit. The only difference is who pays for it (directly at least). These fees don't "hurt" retailers as you say because all of them price the fees in. OTOH, removing the fees has helped the retailers because as I said the fee was already priced in and now they get to keep it.

Don't get me wrong, I love nothing more than sticking it to the big banks but this isn't really sticking it to them since they will just recoup the costs from their account holders. If people didn't flee from the TBTF banks after they robbed us blind I doubt a $5/mo fee is going to make them switch. Most other big banks are now charging for checking accounts one way or another, I personally use a credit union but I don't see a huge rush to them over this.

I just don't agree at all. I don't care if retailers think they may be able to charge the same, eventually they will need to cut prices to stay competitive. So to me, that is a non-issue. People didn't flee TBTF banks because it didn't impact them directly. Once they get hit in the wallet, they will flee and are already starting to flee. Just look at how many people fled netflix. There will always be banks that will offer free checking/debit because they have other ways to make money, but they all depend on retaining customers and having access to their money. BoA thinks that these fees are inevitably going to be charged all banks, but they are dead wrong.

 

[LTC8K6]

I just don't agree at all. I don't care if retailers think they may be able to charge the same, eventually they will need to cut prices to stay competitive. So to me, that is a non-issue. People didn't flee TBTF banks because it didn't impact them directly. Once they get hit in the wallet, they will flee and are already starting to flee. Just look at how many people fled netflix. There will always be banks that will offer free checking/debit because they have other ways to make money, but they all depend on retaining customers and having access to their money. BoA thinks that these fees are inevitably going to be charged all banks, but they are dead wrong.

IIRC, all of the big banks are going with such fees.

The bill only applies to big banks with $10B in assets or more, I believe.

I wonder if some big banks will just split into 2 smaller entities to be rid of the regulations?

 

[dank69]

IIRC, all of the big banks are going with such fees.

The bill only applies to big banks with $10B in assets or more, I believe.

I wonder if some big banks will just split into 2 smaller entities to be rid of the regulations?

Doesn't matter. Banks can make profits without charging these fees. Therefore, smart bankers will not charge these fees in order to attract more customers. They know they can make profits elsewhere, no matter how much some republicans want you to think otherwise.

 

[LTC8K6]

Best explanation I have seen regarding the "Durbin tax".

http://www.hoover.org/publications/defining-ideas/article/95011

 

[LTC8K6]

Doesn't matter. Banks can make profits without charging these fees. Therefore, smart bankers will not charge these fees in order to attract more customers. They know they can make profits elsewhere, no matter how much some republicans want you to think otherwise.

How should the banks make up the difference?

 

[Dulanic]

Best explanation I have seen regarding the "Durbin tax".

http://www.hoover.org/publications/defining-ideas/article/95011

The bill was stupid from the start. It does absolutely nothing to help the consumer it only costs the consumer.

 

[Darwin333]

I just don't agree at all. I don't care if retailers think they may be able to charge the same, eventually they will need to cut prices to stay competitive. So to me, that is a non-issue. People didn't flee TBTF banks because it didn't impact them directly. Once they get hit in the wallet, they will flee and are already starting to flee. Just look at how many people fled netflix. There will always be banks that will offer free checking/debit because they have other ways to make money, but they all depend on retaining customers and having access to their money. BoA thinks that these fees are inevitably going to be charged all banks, but they are dead wrong.

Competitive??? Are you serious? Do you even know how much of a fee this was, per item sold, to retailers? If, and that is a really big freaking if, a single retailer reduces prices to reflect the savings from this fee no one would notice at all. We are talking pennies per item or a few dimes a transaction for the most part. Home Depot has already stated that its profits will increase $35M a year due to the law (note they did not say that consumers would save $35M a year).

OTOH, we are seeing tons of banks implement fees for what used to be free checking accounts. The majority of the ones who are not are exempt from the policy we are discussing.

So basically the prices remain the same (retailers keeping the extra) and now the average joe gets charged an extra fee, leaving them with just a bit less in their pockets.

BoA thinks that these fees are inevitably going to be charged all banks, but they are dead wrong.

Don't be foolish, BoA doesn't think these fees are inevitably going to be charged by all banks, just those that fall under the new regulation. The rest continue with their existing business model.


PS Again, I have absolutely zero love for the big banks, matter of fact you will be hard pressed to find a person here who has spoken out against them more than I. If you want to regulate them clean out of the market I am good with that but lets be honest about what is happening and why.

 

[Darwin333]

Doesn't matter. Banks can make profits without charging these fees. Therefore, smart bankers will not charge these fees in order to attract more customers. They know they can make profits elsewhere, no matter how much some republicans want you to think otherwise.

You mean the banks that the regulations in question don't apply to right? Why would those banks change anything since the existing profit models are working just fine (since they aren't affected by the same regs the big banks are)?

 

[dank69]

How should the banks make up the difference?

You mean the difference between 400 million in profit over the next quarter instead of 500 million? An honest businessman would be thankful for the time he had to rape the country over the past 30 years and accept the fact that he'll have to deal with the paltry 400 million per quarter until the republicans get back in power.

 

[dank69]

Competitive??? Are you serious? Do you even know how much of a fee this was, per item sold, to retailers? If, and that is a really big freaking if, a single retailer reduces prices to reflect the savings from this fee no one would notice at all. We are talking pennies per item or a few dimes a transaction for the most part. Home Depot has already stated that its profits will increase $35M a year due to the law (note they did not say that consumers would save $35M a year).

OTOH, we are seeing tons of banks implement fees for what used to be free checking accounts. The majority of the ones who are not are exempt from the policy we are discussing.

So basically the prices remain the same (retailers keeping the extra) and now the average joe gets charged an extra fee, leaving them with just a bit less in their pockets.




Don't be foolish, BoA doesn't think these fees are inevitably going to be charged by all banks, just those that fall under the new regulation. The rest continue with their existing business model.


PS Again, I have absolutely zero love for the big banks, matter of fact you will be hard pressed to find a person here who has spoken out against them more than I. If you want to regulate them clean out of the market I am good with that but lets be honest about what is happening and why.

Just give it some time. If home depot doesn't lower prices, lowe's will and home depot will fall further behind than they already are.

You mean the banks that the regulations in question don't apply to right? Why would those banks change anything since the existing profit models are working just fine (since they aren't affected by the same regs the big banks are)?

Hey, anything that helps shift power from banks that are TBTF to smaller banks is aces in my book.

 

[Dulanic]

Just give it some time. If home depot doesn't lower prices, lowe's will and home depot will fall further behind than they already are.

Yeah...go on thinking that. No retailers are going to lower their prices due to this.

 

[dank69]

Yeah...go on thinking that. No retailers are going to lower their prices due to this.

Heh, this reminds me of when CT changed the laws to allow liquor stores to stay open until 9pm instead of 8pm. The local store owner said to me that he wasn't going to stay open past 8pm anyway. He didn't want to and didn't think he had to. I laughed and said he would eventually lose business if he didn't stay open later. Sure enough, one month later, there he was staying open until 9pm every night. I asked him why, and sure enough he said he was losing business when he closed at 8pm.

Only time will tell which one of us is right, we'll just have to wait and see.

 

[spidey07]

Those that do not study history are doomed to repeat it.

 

[LTC8K6]

You mean the difference between 400 million in profit over the next quarter instead of 500 million? An honest businessman would be thankful for the time he had to rape the country over the past 30 years and accept the fact that he'll have to deal with the paltry 400 million per quarter until the republicans get back in power.

Yes, I mean that 20%.

 

[dmcowen674]

WTF? We need a person to tell companies what kind of fees they can start charging customers now? Are you fucking kidding me?

I have no love for any of the banks, but that is just fucked up.

Obama needs to get the fuck out of the white house in 2012, had enough of his BS a long time ago.

Banks brought this on by charging overdraft charges when they manipulated the order at which money flowed in the low class of U.S. citizens accounts.

Now that that has been fixed banks want to dump the low class citizens of the U.S. completely. Only the rich are allowed to have a banking account now, all others have to use Check cashing Service places.

This is the cold hard facts that the rich elite on here support.

 

[feralkid]

Those that do not study history are doomed to repeat it.

You are solid proof of that.

 

[LTC8K6]

http://www.nationalreview.com/articles/279198/why-your-bank-charging-more-fees-john-berlau

"From the very beginning, Durbin tipped his hand that his efforts were on behalf of the retail fat cats. When he introduced his amendment to Dodd-Frank in May 2010, Durbin said on the Senate floor that his measure came about after Walgreens’s CEO called him to complain that the transaction fees the company pays to process debit and credit cards were “the fourth largest item of cost for their business.”

Yet in this era of the “Buffett Rule” and bashing “millionaires and billionaires,” Durbin and other liberal proponents of these price controls never quite explained why Congress should be concerned with the routine costs of doing business for a retail chain such as Walgreens, which makes $2 billion in annual profits. Or for that matter, other retail behemoths such as Walmart or Home Depot — or Warren Buffett’s Berkshire Hathaway, with retail units from Dairy Queen to Nebraska Furniture Mart — that will benefit from this regulation-driven corporate welfare."

 

[Darwin333]

Just give it some time. If home depot doesn't lower prices, lowe's will and home depot will fall further behind than they already are.

I don't know anyone that would even notice that Lowes had lowered its prices to reflect the money they will be saving. We are talking about a few pennies on a lightbulb. Would you really shop somewhere else because the item was 2 or 3 cents cheaper?

Hey, anything that helps shift power from banks that are TBTF to smaller banks is aces in my book.

I can understand that but you should use that as your argument instead of all the other points you have attempted to make.