How to Distinguish the Bank's Quarterly Results
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Unemployment is already over 10% in Cali.
Like I said: uffdah!
He is beyond credibility to the point where he will most likely lose his job, whether through Board action, proxy battle or the (pending) insolvency
From an economic standpoint we believe we can see weak but positive GDP growth by the fourth quarter this year.
. . . and for several years to come after that. That Mr. Lewis did not say.
I'm shocked, SHOCKED about this latest development. Why didn't anyone warn us about problems with credit cards?
UE is over 12% in Michigan and just shy of 10% here in Florida...It has become clear to me that banksters don't operate from a reality based paradigm.
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With such a pie-in-the-sky prognosis on unemployment, it's difficult to take anything else he projects will happen very seriously.
Is there anything else Lewis would like to comment about that he's not an expert on? Perhaps the AL Central race?
He's dreaming, if he thinks unemployment stays single digits.
That was Lewis putting a positive spin on the economy--they will be broken up within a year--I expect GS wants the Merrill group.
Let's go shopping!!!
Uncle Sam has opened the flood gates with "quatitative easing" for all of us! No fear of inflation at all!
Oh, I forgot, also THANKS China...WE LOVE YA! 
"Are you in good hands?". I am, Bernanke is on my side!
Lewis is playing with fire when he publicly doubts the year end recovery. Doesn't he understand that with the government giving him money, he is supposed to support the government's line about 2nd half recovery?
Someone needs to put Kermit on life support...
We believe unemployment levels won't peak until next year at somewhere in the high single digits. At this point we don't see unemployment meeting or exceeding 10% but that will of course be impact by how long the economy stays in recession.
Given the jobless claims we've been seeing it's reasonable to expect an unemployment number approaching 9% in the next month or two.
Barring a dramatic turnaround in the economy, double digit unemployment seems almost like a certainty at this point.
The Conference Board released their survey of leading indicators this morning. Leading indicators decreased 0.3 percent from Feb.
http://www.conference-board.org/economics/bci/pressRelease_output.cfm?cid=1
I guess they didn't get Obama's memo regarding "Only Hapy News Permitted."
Elmo is making Kermit his bitch.
Late '09 or early '10. What's that? The 6th or 7th half of the year?
Nothing like reading comedy on Monday morning to start the week.
jo6pac
Stop posting the "Turner" "leak" about the stress test. The guy "leaking" it is a semi-employed building janitor/window weatherstripper from Jersey City, New Jersey.
Hal turner's "leaks" are all bullshit lies designed to drive traffic to his failed white supremacist radio show/blog. His last "scoop" was when he bought one of those novelty "amero" coins and said that he had a friend inside the treasury department and a major bank tell him that they had shipped pallets of these new currency units to various fed reserve banks. High ranking federal officials hang out with and leak info to janitors in jersey slums all the time, don't you know.
In truth he is a part time janitor and window repair man (when he can get this work) in jersey city, new jersey, where he lives in and manages a crappy apartment complex twenty feet from a huge interstate. He was involved in the white nationalist movement, specifically in the "fundraising for himself" part of it, until a series of emails leaked that appeared to show him selling out the personal information of white nationalists to an FBI agent as a regular paid informant arrangement type of exchange.
Since "splitting" from the movement he has relied on various retarded, 9/11 here is a dead alien type of "leaks" to drive traffic and possibly get his radio show back.
Now you are educated. Don't post this shithead's links. He is a window repairman from new jersey who has been rejected even by the white nationalists.
http://en.wikipedia.org/wiki/Hal_Turner
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Not exceeding 10% !!!!!
Well we now know of at one bank
that will not survive the "stress" test.
Headline UE (the U-3 series) gets most of the attention, but I will bang the U-6 drum yet again and say that this unemployment measure continues to be the leading indicator for consumer credit deterioration...
Don't worry, PPT will keep Elmo's nonsense to a total of down 100-150 today.
I bet we even finish the day barely afloat above 8000, for one final swan song, before our new life in the 7000s
Lighten up, Hoops. Haven't you ever heard the Parable of the Broken Window?
- Nemo
Kunstler in full: http://jameshowardkunstler.typepad.com/
MEL wrote on Mon, 04/20/2009 - 10:46am.
That was Lewis putting a positive spin on the economy--they will be broken up within a year--I expect GS wants the Merrill group
We could only be so lucky - but break-up a la Citi/Smith Barney would be a most welcome turn of events
I actually paid the guy a visit once.
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That's Ballgame, Goat Herders wrote on Mon, 04/20/2009 - 7:53am.
Kunstler in full: http://jameshowardkunstler.typepad.com/
JHK "in full" is like chugging single malt. Best in small doses over time.
Agree ac.
10% at least by 4 Q 2009.
12% is near.
But even the spin change in the statement hedges toward a worse outlook than such a spin even 1 quarter ago would be...
I think a few economists are actually starting to understand that the length of the "recession" itself is such that further deterioration will self-feed, and worsen, not bottom with a quick uptick recovery.
Recovery implies reorganizing the economy, including assumptions, presuppositions, and philsophies, not waiting for some inevitable secular cylical event-recovery.
--bh
I like you as you are, Hoops. Steady on the drumbeat.
and aged sir, don't forget aged wrt single malts...
Somehow I don't think getting a visit from Hoopajoops is a desireable outcome...
Hoopajoops LTD (member) wrote on Mon, 04/20/2009 - 7:54am.
I actually paid the guy a visit once.
## Were you getting a quote for a weather strip job?
Mannwich: "Why didn't anyone warn us about problems with credit cards? "
This is not credit card losses. $1.77 billion is tiny. Wait until you see the losses in the third quarter. I think the amount added to reserves is in the right neighborhood, but I don't think they are going to drop off as much as Ken Lewis expects.
Lewis will be one of the principal defendants when the show trials begin. He'll be easy to identify. He'll be handcuffed to Obama and Summers.
agree energycon.
U6 drum is more important if your business model involves giving people credit and charging them interest for it.
U6 high equals high defaults, high charge-offs, and low consumption across the board.
--bh
"that will of course be impact[ed?] by how long the economy stays in recession."
You'd think the guy never went to high school. He can't even express himself naturally. Why not "that will of course depend upon how long...." "be impacted by" is such a contemptible form of speech.
Hoopajoops, are you perchance Turner's former handler?
http://www.shadowstats.com/alternate_data
some say we're at 20% now...
Never seen such purposed dissembling. Read between the lines and you get, "This drecession will be long and deep, recovery talk is only to project confidence, none of our economists believe a return to quality growth for at least a decade (in fact we had to take guns out of some of their mouths). Credit losses will be staggering and if we survive through 2011, it will require massive wealth extractions from taxpayers and equity/debt suckers. Unemployment, we hope, will stay under 10% (If we can get the BLS to step up their special massaging, otherwise it may well exceed 25% in real terms). This script has been prepared for us by the gov't. Don't plan on borrowing for anything whatsoever for a decade at least.
Devaluation, private/public debt exchange, expert gamesmanship, graduated but compulsory bagholding on market participants, misinformation, and distractions will be the only way we get through this. If we get through this...
10 % is but a distant memory in California.
i think that a lot of people got suckered into the "Turner Radio Network" handle, thinking it was somehow related to the "Turner Broadcasting Network"
Although according to Krugman/Yglesias, California is a wealthy state.
Today's Bernanke Bwa-ha-ha-ha-
WASHINGTON (AP) - Americans need to sharpen their financial know-how to help them best use their money, especially during the current economic crisis, Federal Reserve Chairman Ben Bernanke said Monday.
"As the global economy continues to experience extraordinary turbulence ... the need has never been greater for initiatives that help consumers learn to manage their money wisely," Bernanke said in brief taped remarks kicking off a conference on financial literacy in Chicago sponsored by the Federal Reserve Bank there.
Improving financial knowledge also can help protect people from scam artists, he said.
On that front, the Fed last month launched an effort to warn consumers about foreclosures scams that are increasingly preying on homeowners.
The modern financial marketplace has led to an explosion of financial products for people to choose from. To make smart decisions, consumers need to shop around and make sure they understand the pros and cons of any financial choice - from taking out a mortgage or car loan to selecting a certificate of deposit or other investments.
The current financial crisis - the worst since the 1930s - has been blamed partly on lax lending standards, and in some cases people taking out mortgages that they didn't truly understand to buy homes they couldn't afford. Bernanke didn't mention that Monday, but he has in past remarks.
Bernanke said experts attending the conference would discuss "best practices" in financial literacy and how they can be applied to a rapidly changing and globally interconnected financial landscape.
It is essential that government and private companies work together. "Only by joining forces will we be successful," Bernanke said.
I am actually surprised by the market's response. BAC down 14%. People are looking past the (bullshit) headline numbers and focusing on the fundamental deterioration of core business (like, you know, lending money). Somewhat said it above: The economy will not recover until major structural changes occur. We can't go back to an economy based on selling each other houses and crap from China (or at least not or long).
I suggest a name change for BOA. How about the Bank of Charlotte NC?
Or, a change of status: Charlotte NC Credit Union?
its the most downbeat thing I've heard so far...its not the truth but its closer to the truth than we've seen so far this earning period.
Jim, after the wave of outsourcing earlier this decade, people here tend to call them Bank of India.
Lewis is benefiting from the lesson that Greenburg taught AIG after he was forced out. Can BofA afford a bitter ex CEO making the media rounds and then testifying to Congress? Can any of the big banks?
Reaganomics worked--the rich got much richer, the rest of us got trickled on. CEOs did well--as did many in finance--but the economy became top heavy. Even when all the evil banksters lose their jobs, they'll still be the winners--big bank accounts in safe Canadian banks.
Guys,
You are being too hard on Lewis, in my opinion. His talk was about the most honest assessment of things I have seen so far this quarter. He basically makes it easy for you to read between the lines, and he didn't have to. I realize honesty is a debased value these days, and it is unfortunate that he has to use language this way, but he is under enormous pressure from the government to put on a happy face. That he did a piss-poor job of it gives me a tad more respect for him.
Interesting resistance at 7900 for nearly an hour
Lewis doesn't have a clue.
I remember maria interviewing him in early november last year. At the time Lewis stated that we would see "the last of the writedowns in q109 and the pricing for housing stabilize by the end H109".
At 12/31/08, they had $55 billion of home equity loans in CA and FL. They also had $100 billion of regular mortgages in those states. Oh, and as of this morning, they have a market cap of $57 billion.
Let's do a little math, shall we? If their CA and FL portfolios were worth 1/3 less than what is on the books (quite likely), it would wipe out their remaining market cap if all taken at once. So, if we were to assume they were making a generous $5 billion per quarter in profits, it would take about 3 years to recover from just the CA and FL real estate losses. That doesn't include any other states, or credit cards, etc.
I'm guessing the stress test team is trying to figure out how to count expected future income as an asset right now. People are frequently insolvent, with assets less than liabilities. Only a fraction ever file bankruptcy. Often they slowly earn their way out of problems.
"As the global economy continues to experience extraordinary turbulence ... the need has never been greater for initiatives that help consumers learn to manage their money wisely," Bernanke said
It better be a lifetime learning program since Ben favors continued "financial innovation."
"believe credit is going to get worse " At odd with Omama's Green Shoots ?!
I wonder if there are a considerable amount of sell options that get automatically activated at 7900 by people who want to stay way ahead of the next downswing and don't get caught in the middle of us going from 8000 to 7000 in five days. That could be the furious 7900 resistance.
That's Ballgame, Goat Herders wrote on Mon, 04/20/2009 - 8:19am.
Interesting resistance at 7900 for nearly an hour
The PPT came to work early today. Let's see if they go home at 3:00.
That's Ballgame, Goat Herders wrote on Mon, 04/20/2009 - 8:19am.
Interesting resistance at 7900 for nearly an hour
## It's a mystery, wrapped in an enigma, inside of a riddle... or words to that effect. The grown ups are cycling through their lunch hour, wait for it. It's not unlike an NBA game--all the real action happens in the last two minutes.
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Were you getting a quote for a weather strip job?
No, of course not. I was there to pick up the secret minutes of a closed meeting at the federal reserve about breeding genetically modified mexicans in order to speed up the construction of the NAFTA super-highway and to see if he could look at a clogged storm drain in one of my buildings.
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is this significant?
New York Times - U.S. May Convert Banks' Bailouts to Common Equity
So when do they expect to resume paying dividends?
If preferred to common shift of TARP $$ happens, they'll have so many shares out....
What does that do to share value? Say compared to 2006...$55/share and $4.50 div.
My deflation expectations are well anchored, are yours?
Nemo (member) wrote
Well, this should help BofA's earnings as everyone dumps their bonds, right?
I'm waiting for "We could now buy back our stock for 2 cents per share, drastically reducing our future dividend expense, therefore..."
Beware of rumors. I mean that very seriously. They could be self-serving provocations. They could even be worse than that. The Web, as we know by know, is a broad conduit of rumor and provocation.
Pavel Chichikov
A dawg probably lapped this right up -
'One very plain and straightforward example at hand is the announcement last week of a plan to build a high speed rail network. To be blunt about it, this is perfectly fucking stupid.'
And why does JHK think that? 'It will require a whole new track network, because high speed trains can't run on the old rights of way with their less forgiving curve ratios and grades. We would be so much better off simply fixing up and reactivating the normal-speed track system that is sitting out there rusting in the rain -- and save our more grandiose visions for a later time.'
Well, like some posters here, JHK seems to think America is no longer actually capable of pulling off the sort of major rail project that a country like Spain is, and instead should just try to get by as best it can with what it has. Which is actually good advice, in its way - bankrupts can't be choosy.
As JHK notes -
'I don't like to be misunderstood. With the airlines in a business death spiral, and mass motoring doomed, we need a national passenger rail system desperately. But we already have one that used to be the envy of the world before we abandoned it. And we don't have either the time or the resources to build a new parallel network.
But grandiosity is just another way that we lie to ourselves about where we're at and what is really possible.'
That last line sounds like vintage Kunstler - but it never seems to go down smooth with people who can't seem to grasp they live in a bankrupt nation.
It isn't the only one, of course.
Let me restate: Credit is going to get worse, before it gets better.
While credit is going to get worse along with unemployment we will continue to post fictional profit which will exceed, even your cynical expectations.
--bh
'by know'
now.
Pavel Chichikov
New York Times - U.S. May Convert Banks' Bailouts to Common Equity
Significant? If you consider guarantees being converted into real cash and fed into the black hole of finance then yes. If you mean the big insolvent banks will have more oversight, new management, new directors and a de facto nationalization then no.
".......breeding genetically modified mexicans in order to speed up the construction of the NAFTA super-highway...."
I KNEW IT!!!
- - - - -
Black 
Ranch
The Turner site- pseudo bank stress test results information appears to have been lifted by someone from this site:
http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&news...
At some point we are going to have to stiff the chinese and other swf. that will not go over well. better learn to fix that flat screen and ride a bicycle.
Yes there's green shoots, but here comes the lawnmower.
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"The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails." -- William Arthur Ward
" "be impacted by" is such a contemptible form of speech.
Thank you, saagua. One of the many reasons I love this blog.
The Turner Radio Network has obtained the stress test results. They are very bad. The most salient points from the stress tests appear below.
1) Of the top nineteen (19) banks in the nation, sixteen (16) are already technically insolvent. (Based upon the "alternative more adverse" scenario which had a 3.3 percent contraction of the U.S. Economy in 2009, accompanied by 8.9 percent unemployment, followed by 0.5 percent growth of the U.S. Economy but a 10.3 percent jobless in 2010.)
2) Of the 16 banks that are already technically insolvent, not even one can withstand any disruption of cash flow at all or any further deterioration in non-paying loans. (Without further government injections of cash)
3) If any two of the 16 insolvent banks go under, they will totally wipe out all remaining FDIC insurance funding.
http://turnerradionetwork.blogspot.com/2009/04/leaked-bank-stress-test-r...
Fresno CA unemployment is now 17%.....
Wasn't it just a month ago that BofA talking heads were calling for blue skies ahead...and pointing out how well positioned BofA was for the future.... Unreal.
Well, this should help BofA's earnings as everyone dumps their bonds, right?
- Nemo