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Bloomberg Article On Citi Failing Stress Test


Parsad
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Article discussing Pandit's overexuberance before the results came out.  He should have learned Moynihan's lesson from last year.  What I like is Moynihan's attitude since then and this one comment from the article:

 

“We are not asking to change the dividend posture because, frankly, we’re close enough to Basel 3 that we just want to blow through it,” Moynihan said in a Jan. 19 staff meeting. “For 2012, we’re sticking to building back capital.”

 

Cheers!

 

http://www.bloomberg.com/news/2012-03-14/pandit-repeats-moynihan-misstep-as-fed-rebuffs-citigroup.html

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I am thinking that if BofA gets to 7.5% Tier 1 Basel III as planned by the end of this year, they have already made it.  The rest comes from the loan runoff and the monetization of the deferred tax thingy.

 

Pretty soon everyone is going to be talking about Bank of America's "fortress balance sheet" - just a matter of time now.

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I am thinking that if BofA gets to 7.5% Tier 1 Basel III as planned by the end of this year, they have already made it.  The rest comes from the loan runoff and the monetization of the deferred tax thingy.

 

I think that is the goal.  You take care of the business and the market price takes care of itself.  If they have a solid balance sheet, people will care less about the loss provisions, litigation, et al, because they know the cash flow alone can easily cover all of that going forward.  Frankly, I think they are provisioning as well as anyone relative to the book they were handed by Countrywide.  Take a look at their annual non-performing loans and think about what type of shit they were writing before the downturn.  The quality of their book is getting better year after year.  Cheers! 

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