Bull Market Apogee Predicted - 2,863

Bank of America sees end of bull market coming in 2018

Excerpt:

Here's how it will happen:

• Bank of America Merrill Lynch predicts "capitulation" for the bull market in 2018, with the S&P 500 peaking at 2,863.
• Strategist Michael Hartnett said the firm is prepared to "downgrade risk aggressively" once it sees the triggers in place.
• A shift from passive to active in investor allocations would be one of the signs that the rally is about over.

Comment: Sounds plausible. 2,863 is 10% above today's level. Chart top is from the data below.

Milestone	Date Achieved
1,614	5/3/13
1,707	8/1/13
1,805	11/22/13
1,901	5/23/14
2,000	8/26/14
2,100	2/17/15
2,203	11/22/16
2,308	2/9/17
2,402	5/15/17
2,500	9/15/17
2,594	11/22/17
2,863	8/15/18 (??)

Everything went right for stock markets in 2017—can that continue? https://t.co/W8oJxxe96U via @WSJ

— James Peet (@jrpeet) December 29, 2017

2018 #GoldmanSachs #SP500 https://t.co/4NS5PJtBim pic.twitter.com/WJ4PLy9P8y

— James Peet (@jrpeet) January 7, 2018

The $ 1,000,000 Moon

BofA Right to Fire Broker Who Mooned Boss: Court
  Excerpt:

Selch burst into a conference room where executives from Columbia were meeting to give them a piece of his mind.

He wound up giving them a piece of something else as well.

First Selch asked if he had a non-compete agreement, which on Wall Street is usually a way of threatening to quit and go to work for a competitor.

After the executives said he didn't have a non-compete, Selch mooned them, told one of the New York-based executives never to return to Chicago, and left the meeting.

Extraordinarily, Selch wasn't fired. Instead he was issued a formal warning. Selch's boss testified that while 99 percent of employees would have been immediately fired, Selch was one of the one percent who could be granted a one free mooning reprieve.

The executive actually fought for Selch to keep his job. When Columbia CEO Brian Banks found out about this incident, he insisted that Selch be fired.

The behavior was too "egregious" to allow Selch to continue at Columbia. No free mooning at Bank of America, Banks decided-even if you are in the one percent.

The firing meant that Selch lost a multi-million contingent bonus package that would have vested if he had remained at the company a few months more. Because he was fired, Bank of America got the keep the money.

Comment:

George Costanza - Was that wrong?

Bank of Some of America

Bank of America Ponders Retreat

Excerpt:

Bank of America Corp. has told U.S. regulators that it is willing to retreat from some parts of the country if its financial problems deepen, according to people familiar with the situation.

Executives at the Charlotte, N.C., financial giant put the potential move on a list of emergency scenarios submitted to the Federal Reserve last year, these people said. While people close to Bank of America insist that no retreat is imminent, even the possibility of selling branches and losing customers it spent huge sums to lure underscores the depth of its problems.

Comment: Bank of America is one of three coast-to-coast banks. The others: JP Morgan Chase and Wells Fargo. WSJ article has a nice graphic that shows history of Bank of America growth. Image: retro BankAmericaCard

Wells Fargo "Little Jack Horner" of big banks

Wells, B of A: A Tale of Two Capital Ratios

Excerpt:

If the financial industry were made up of nursery rhymes, Wells Fargo & Co. would be Little Jack Horner and Bank of America Corp. would be regarded as Pinocchio.

As evidenced by the reaction to the two banks' second-quarter results on Tuesday, Bank of America is plagued by a lack of credibility among analysts and investors. That's a problem Wells Fargo, which continues to pull out plum earnings, has been able to avoid.

The divergence in the two banks' bottom line results was stark. Wells Fargo had record earnings, while Bank of America reported a big net loss. Both banks continued to feel the brunt of the sluggish economic rebound, reporting anemic revenue.

The primary concern for analysts and investors, though, seemed to revolve around capital levels, a subject of ongoing consternation and confusion. Though banks have until 2019 to meet Basel III requirements, there is still some uncertainty over how the requirements will be phased in for each bank, and the effect of future economic setbacks on those capital levels. Here is where the differences between B of A and Wells might be most profound.

...

[Bank of America] expects to have a tier 1 common ratio between 6.75% and 7% by January 2013, well above Basel III capital requirements of 3.5% for that time.

Wells, on the other hand, now estimates that its tier 1 capital under Basel III rules stands at 7.4%, growing quarter over quarter despite a return to paying out dividends and buying back shares.

Comment: Little Jack Horner source. Pinocchio source

He put in his thumb,
And pulled out a plum,
And said 'What a good bank am I!

Charlotte’s banking bust

The bust hits the boomtown that banks built

Excerpt:

A monument to the financial crisis is rising amid this city's thicket of skyscrapers: a gleaming, glass-walled trophy tower that was intended as a fitting headquarters for Wachovia's national banking empire.

It will open instead as the headquarters of a regional power company. Wachovia, unable to survive a run of bad decisions, was swallowed by San Francisco-based Wells Fargo during the depths of the crisis last year.

Few American cities prospered more over the past two decades than Charlotte, its growth propelled and gilded by Wachovia and its crosstown rival, Bank of America. Executives shoehorned gaudy mansions into old neighborhoods around downtown. Workers poured into vast subdivisions on the city's ever-expanding periphery. With coffers overflowing, giddy public officials spent tax dollars on a manmade river for whitewater rafting.

Comment: Of interest to me on several counts: 1.) the WF / Wachovia merger; 2.) Charlotte is a possible retirement location

Banking: Common sense fee adjustments

Chase and Bank of America Revise Fee Policies

Excerpt:

Bank of America said it would allow current customers to turn off the ability to spend when their account hits zero, starting Oct. 19. Next June, the bank plans to limit the number of times each year that current customers can overdraw their accounts when using a debit card at a store. It will let new customers choose whether they want overdraft protection when they are opening their account.

Chase plans to eliminate by the first quarter of next year a common industry practice that enraged many consumers. Instead of lumping a day’s worth of debit card and A.T.M. transactions together and then processing the highest amounts first — a practice that has caused large numbers of consumers to overdraw more quickly and pay more fees — it will credit the transactions chronologically. Chase also plans to allow customers to opt out of overdraft coverage.

Comment: Commendable moves

Updated - Wells Fargo also makes changes (source)

Wells Fargo today announced changes to its overdraft practices for Wells Fargo and Wachovia customers. Wells Fargo will eliminate overdraft fees for customers when they overdraw their accounts by $5 or less and will charge no more than four overdraft fees per day. In addition, Wells Fargo and Wachovia customers will be able to opt out of overdraft coverage, meaning customers can specify that they don’t want their transactions authorized into overdraft if funds aren’t available to cover the transaction.

BAC: Where was the Due diligence?

Bank of America to receive additional $20 billion

Excerpt:

Two weeks after closing its purchase of Merrill Lynch at the urging of U.S. regulators, the government cemented a deal at midnight Thursday to supply Bank of America with a fresh $20 billion capital injection and absorb as much as $98.2 billion in losses on toxic assets, according to people involved in the transaction.

The bank had been pressing the government for help after it was surprised to learn that Merrill would be taking a fourth-quarter write-down of $15 billion to $20 billion, according to two people who have been briefed on the situation, in addition to Bank of America's rising consumer loan losses.

The second lifeline brings the government's total stake in Bank of America to $45 billion and makes it the bank's largest shareholder, with a stake of about 6 percent.

Comment: Due diligence. How well did Bank of America dig into Merrill's books? Seems like not deep enough!

BAC: stricter lending guidelines

BofA marks end of mortgage era with plans for higher standards for Countrywide loans

Excerpt:

Bank of America said Tuesday that it will have tighter lending criteria for Countrywide mortgages when it acquires the troubled lender later this year.

The bank will also stop offering subprime mortgages and so-called option adjustable-rate mortgages. Option ARMs have been widely criticized because the loan balance can rise over time if borrowers opt to make the lowest mortgage payment allowed.

BofA will also curtail low-documentation and no-documentation loans, which require little if any proof of assets or income. Some have dubbed such mortgages liar loans.

"We recognize this tightening, by definition, restricts the availability of credit to some borrowers," said Bruce Hammonds, BofA's global consumer credit executive. "However, this will help ensure that those who get loans can afford to repay them."

California's largest bank disclosed its plans to implement stricter lending guidelines following its purchase of Countrywide as part of its testimony before the Federal Reserve in Chicago.



Comment: Article concludes with merger & acquistion comments

Despite the bank's full plate with the integration of LaSalle Bank in Chicago and Countrywide later this year, Lewis expressed interest in participating in a Federal Reserve-led rescue of a banking company "if it became available at a big discount."

Such a deal would require the Fed to make an exception to the 10 percent regulatory cap on the amount of U.S. deposits a bank can hold. BofA has been brushing up against that cap for years.

If the Fed does orchestrate a rescue of a major bank, BofA will have plenty of competition for participating in the deal. Wells Fargo (NYSE: WFC) CEO John Stumpf also expressed his willingness to participate in a Fed-assisted acquisition in an interview with the San Francisco Business Times last month.