BofA would like you to know a few things about its capital adequacy, including (1) that Henry Blodget is a schmuck, (2) that the Wall Street Journal agrees, and (3) look over there, earthquake!
Henry Blodget, who runs financial blog Business Insider, aggregated estimates from other sources to say the bank may face a capital shortfall of $100 billion to $200 billion.
In a statement Tuesday, Bank of America said “Mr. Blodget is making ‘exaggerated and unwarranted claims,’ which is what the [Securities and Exchange Commission] stated publicly when he was permanently banned from the securities industry in 2003.”
Zing! But not everyone who thinks that BofA may need to raise capital has been banned from the securities industry. In particular, given the rumors swirling that that BofA is going to be rolled up into the One Bank To Rule Them All, it might be worth checking in with JPMorgan. Their credit analysts have a note out today, and they think the news is so bad it’s good: Continue reading »
TG was admitted the hospital today where he will have “minor surgery” to deal with the problem. Continue reading »
Iceland really is in a scary spot. True, the small nation has sort of been asking for it by pushing their carry trade these last many months, and inviting the scrutiny of any number of large macro players, any one of whom could, at least in the short term, whipsaw the currency around, and any three of which could cause rather serious medium-term shocks, but we are sort of collectively charmed by the urge Iceland has to swim with the big fish- even when sharks are in the water.
It’s one thing for your market to be down 77% on the day. (A rather serious thing– interesting comment on the usefulness, or lack thereof, of trading halts). It’s another all together when the supermarkets are bare. And this time, it seems they really are. Rumors to this effect before seemed overblown, but our friend in Reykjavik told us by telephone last night that shortages are quite frightfully real, and that the run on the currency makes the obviously import-dependent nation a scary place to be.
Norway, in response to the bank failures in Iceland, had an interesting “mark-to-market” approach for assets in which no ready market exists. To wit:
The OMX Nordic Exchange said in a release late yesterday that it set the prices of the three nationalized banks to zero in the index after “not being able to receive valuations from market participants.”
Take that, Rule 157. Between this and their bank re-capitalization plans, Scandinavia seems to know how to deal with a crisis without pussy-footing around, and without creating fictional marks to support flagging institutions. (It may help that in this case it is Norway setting marks on Icelandic banks, rather than Norway setting marks on Norwegian firms).
In any case, do keep Iceland in your thoughts? You do like rooting for the underdog. Right?
Icelandic Stocks Drop 77% as Trading Resumes After 3-Day Halt [Bloomberg]
Previously:
Unfounded Rumor Of The Morning: Bankrupt Bjork-ville Edition
Well, Can I Get A Slushee At Least?
Like, The Shortest Peg Ev-arh?
Who Couldn’t Go For A Quick Jaunt Up North?
Icelandic Meltdown?
