With the current financial situation of the markets it will be interesting to watch the earnings reports come out. The real indicator will be the third quarter reports. I have to believe that there will be some interesting accounting going on at this time. Some kind of new math…
I am curious to see how BofA is going to get out of paying Countrywide’s debts. This will no drought play out for years with many stock holders claiming they have been wronged. This has got to sound like hitting the lottery for a Lawyer.
Bank of America posted better-than-expected second-quarter earnings of $3.4 billion, or 72 cents a share, which includes pretax merger and restructuring charges of $212.0 million. Analysts had expected 53 cents a share on average, according to Reuters. The bank also dished out a 64 cent dividend despite hard times, as promised in May.
The Charlotte, N.C.-based bank had $20.32 billion in sales during the second quarter, which was higher than the $18.4 billion expected by the Street. Still, the quarter wasn’t nearly as profitable as the bank’s year-ago period, when the company reported earnings of $5.8 billion, or $1.28 a share, on sales of $19.6 billion.
Investors were enthused about the earnings. Bank of America added 5.9%, or $1.63, to $29.12, during afternoon trading in New York.
I have found myself asked where is the impact of the Countrywide sinkhole? The all-stock Countrywide deal, which closed July 1, did not affect the results. If you did factor in the Countrywide debts then the quarterly earnings should be 1.1 billion which is far below market expectations.
I am very concerned about how the media and the impending leaders do not seem to understand this foreclosure mess. There has only been one proven way to clean up foreclosures quickly. That is to offer tax credits to the buyers of these homes. The stimulus package home loan portion only works for people if they have a credit score above 720, 30% loan to value and a loan amount of less than 500K. There is a small area of the country that can get a loan amount of 725K with many strings attached.
Every bank is close to the edge with the real estate values falling so much and so fast. As long as Sen. Chuck does not decide to torpedo another bank by singling them out then everything should work it self out while the economy takes a diet. It appears that Wells Fargo is the best position at the moment to ride out the credit crunch.
It is my opinion that Sen. Obama does not understand the credit crunch. He has not said anything of substance yet. I have heard “change”…..well I have a change for him. Tell me in detail what he plans to change. This guy seems to be a modern Pied Piper.
Sen. McCain does not seem to understand the credit crunch either. At least he in trying to implement some policies which is more than I can say for Obama but he is still McCain. What has happened to our President being a true leader?
I guess time will tell but we need to get our act together. It is time make a plan for war fronts and stick to it. Maybe we should just build a two new bases and ports. One each in Iraq and Afghanistan or just simply get out. In any case we can not put our troops in harms way without a clear cut objective.