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Tuesday, January 22, 2008

Somebody Wake FDR From the Dead!

When the banks start listing billions of losses in one quarter then it is time to say for a fact that we are in a recession. President Bush is waiting for a milk carton to actually tell him that his economy is missing. I’m going onto the Wall Street Journal and buying the White House a prescription for the next year. Maybe if the President is lining the bird cage that is his advisor on the economy lives in he might absorb through osmosis the fact that our economy is past broken.

Articles and facts like this one on Bank of America writing off $5.26 Billion is not a good sign for our economy. Higher ATM fees will not cover this kind of short fall at BOA. Maybe if they raise the fee for a bounced check to $250,000 it might help. Don’t even think about stealing one of those pens chained to the deposit slip counter. That will cost you a billion in fines and the price of your printed checks go up to $100,000 for 200 of them.

Over at the New York Times they have this on the mismanagement of Bank of America and the latest loss statement…

Profit Off 95% at Bank of America

Published: January 22, 2008

Bank of America said Tuesday that its fourth-quarter profit tumbled 95 percent because of huge write-downs of mortgage-related securities and higher provisions for future losses in credit card and home equity loans.

Net income was $268 million, or 5 cents a share, compared with $5.26 billion, or $1.16 a share, in the period a year earlier.

Like other banking giants around the world, which have written down billions of dollars worth of mortgage-related securities as prices for those assets have plunged in recent months, Bank of America, based in Charlotte, N.C., wrote down $5.28 billion worth of mortgage-related securities in the quarter.
- NY Times

Maybe the CEO, Kenneth D. Lewis can help his bank out and take a cut in pay. Then again maybe he could go back to school and learn what banking is really all about. Share holders of Bank of America should be screaming for his resignation! Common sense is in the banks favor when you ask for a loan and apparently that was tossed to the wind at Bank of America and the full responsibility of the record loss rests solely at the CEO’s desk. Then again let’s see what kind of bonus check or stock options he gets to cash this quarter.

This will not be the first or the last large bank to write off billions and the next quarter is just three months away. Who will be stepping up to the table next to declare the bank stock crap? Meanwhile the boys in the executive lounge are selling their stock options off by the millions of shares. No guts, no faith, no glory. Shame and larger than life checking accounts not in Bank of America will be their guilt. In the end they walk away clean and the stock holders pay for it. It doesn’t take a rocket scientist or a banker to know when to get out from under a house on fire with tons of explosives in the basement.

Ken Lewis can retire a rich man or he could pop up somewhere else where all of the bankers move over one chair. I’d prefer that he be prosecuted for negligence but the current White House and the Congress have no teeth. From the banking industry will come the largest OOOPS since the savings and loan crisis. Past mistakes of Kenny Lewis will be forgotten and the opportunity of screwing the customer that more provocative somewhere else will open up. One thing is certain, there is no bank in America that can just write off these kind of losses without paying it forward to the consumer.

Bank of America will survive simply because they are so huge but all the small town banks that invested in home loan bundles will have a vast difference of outcome. Huge difference!

This all comes down to a free market without rules and regulations that are adhered too. If the money was there to be raped and pillaged then guys like Ken Lewis did it and his reward for doing it is much the same as many businesses across our nation. Huge pay checks for screwing the nation over was good for him and bad for you. Long term repercussions just didn’t figure into the bonus checks. Check cashed, where is the opportunity to get the next big check is all that they looked at.

Tar and feathering should make a come back and we should start with the sell out of America on Wall Street! The street lined with gold if you can afford the entrance fee. Middle class and poor need not apply you disgusting infidels of America.

Common sense is not dead, it just has no place in the board room of corporate America.


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