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Bank stocks plunge on fresh insolvency fears
AP / Yahoo News ^ | Thursday January 15, 2009 | Stevenson Jacobs, AP Business Writer

Posted on 01/15/2009 3:02:01 PM PST by gpk9

NEW YORK (AP) -- Shares of major U.S. banks plunged Thursday as the government mulled giving Bank of America Corp. a fresh multibillion-dollar aid package, raising fears on Wall Street that the battered financial sector may need an even bigger bailout.

Bank of America shares fell as much as 28 percent -- dropping to their lowest level in 18 years -- on news that the bank may seek another capital injection to manage losses from its takeover of Merrill Lynch. Citigroup Inc. shares fell to a near 16-year low as investors braced for horrible fourth-quarter earnings due Friday. And JPMorgan Chase & Co. added to the pessimism with a grim earnings outlook. Shares of all three banks came off their lows later in the day as part of a broad market turnaround.

Still, the carnage fanned investor fears that mounting bank losses and a darkening economic outlook are thwarting government efforts to resuscitate the banking sector. It raised the distinct possibility that the largest financial rescue package in history may swell even further.

"The perception on Wall Street is that things are getting worse and that the banks are bearing the brunt," said Jack A. Ablin, chief investment officer at Harris Private Bank in Chicago.

[snip]

(Excerpt) Read more at finance.yahoo.com ...


TOPICS: Breaking News; Business/Economy; Government; News/Current Events
KEYWORDS: banking; bankstank
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To: Moonman62
The idea is to add liquidity

There is a lot more liquidity than there was five months ago. Whether there is any more solvency is what the world wants to know.

The only way to know that is for the banks to come clean and honestly value their balance sheets. Which I have been waiting for since long before Hank Paulson starred as Chicken Little.

41 posted on 01/15/2009 5:37:53 PM PST by Notary Sojac
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To: gpk9
"I believe we are swiftly approaching the point where people are going stop caring about "fair" and start caring about their financial survival."

Financial survival? Wait till the food riots begin.

42 posted on 01/15/2009 5:38:45 PM PST by blam
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To: Mark was here
Bank of America, the bank of choice of people who bypass the immigration process and sneak into the US illegally, this could not happen to a more fitting bank.

I couldn't agree more. Our local branch has signs in spanish all over - and only a few in english. I'd love to see them have to close their doors.
43 posted on 01/15/2009 5:42:59 PM PST by CottonBall
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To: gpk9
Treasury And Bank Of America Near Bailout Deal

WASHINGTON – Bank of America and the Treasury Department are near an agreement that will provide $15 billion to $20 billion in new government support to the banking giant, a source close to the discussions said Thursday. This source said that the injection of fresh capital will come from the government's $700 billion rescue fund and will be similar to assistance provided last November to Citigroup.

[snip]

44 posted on 01/15/2009 5:47:20 PM PST by blam
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To: nbhunt

QUESTION: Was BOA the bank that was handing out credit cards and banking accounts to people who could not prove they were legal cititzens and no credit history needed?
*****************************************************
Yeah ,, they seemed to have a contest going with WAMU to see how many illegals they could sign...


45 posted on 01/15/2009 6:12:31 PM PST by Neidermeyer
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To: gpk9

That’s a good point, but a banking collapse would seriously damage our financial survival right now, whereas paying back the debt later is in the future.


46 posted on 01/15/2009 6:12:52 PM PST by expatpat
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To: egannacht

What if they gave us the money back then?
**********************************************
Nothing to give back , gone ,,, POOF!! It was never physical currency ,, just some ones and zero’s in a database ,, and now those “dollars” have been all distributed and used up .. no more for you..


47 posted on 01/15/2009 6:15:09 PM PST by Neidermeyer
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To: ConservativeMind

It only takes a few million account holders to get to hundreds of millions, PLUS you get a major depression and the federal deficit balloons from that.


48 posted on 01/15/2009 6:15:51 PM PST by expatpat
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To: expatpat
"... but a banking collapse would seriously damage our financial survival right now ..."

How so? Exactly how would the bankruptcy of a few huge obese bloated overfed irresponsible banks seriously damage our financial survival?
49 posted on 01/15/2009 6:18:26 PM PST by gpk9
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To: Neidermeyer

The “velocity” of currency has slowed below 1.0 for M1 ,, this means that deficit spending or creation of debt of any kind including printing dollar notes has the opposite effect from what we were all taught where “stimulus” spending (however inefficiently) increases GDP/GNP numbers... There’s no real option but to reign in debt or stimulate the living sh*t out of the real economy ,,, ie. YOU and ME our labor and physical production ,,, the only way I see that working is to implement the FairTax and drastically curtail/rescind stupid gov’t regulations and such,,, RIGHT NOW...

This is why Bernanke is speaking about going back to the original intent of the bailout ,, paying off the toxic loans and cancelling the multiplier effects from them in the process... it’s really the only thing that’ll work (even just a little) other than tax relief which we all know will never be approved by the Rats including the big”O”...

Gold has pulled back a little because inflation isn’t in the cards ,,, wholesale inflation has been negative for a few months now and since gasoline/oil was UP last month you can’t put it all off on energy costs .. DEFLATION looks like a real danger in near future...


50 posted on 01/15/2009 6:27:50 PM PST by Neidermeyer
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To: blam
" ... and have been responsible ..."

There is a difference between being responsible and being wise.

One can be responsible in faithfully paying their mortgage payment on time.

But what if said home was purchased at an overly-inflated price in an overly inflated market, with no or extremely low down payment, and said overly-inflated market has since collapsed, and said home is now worth far less than the balance on said mortgage?
51 posted on 01/15/2009 6:30:47 PM PST by gpk9
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To: Moonman62

“a favorite of most conservatives”

More like a fear!


52 posted on 01/15/2009 6:32:21 PM PST by dalereed
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To: blam
"Bank of America and the Treasury Department are near an agreement that will provide $15 billion to $20 billion in new government taxpayer support to the banking giant ..."

There. I fixed it.
53 posted on 01/15/2009 6:39:10 PM PST by gpk9
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To: gpk9

“But what if said home was purchased at an overly-inflated price in an overly inflated market, with no or extremely low down payment, and said overly-inflated market has since collapsed, and said home is now worth far less than the balance on said mortgage? “

You still owe the amount of the contract and shouldn’t be relieved of the obligation to pay it in full.

I don’t believe that bankruptcy should be allowed for anyone under any circumstances.


54 posted on 01/15/2009 6:42:44 PM PST by dalereed
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To: dalereed
"I don’t believe that bankruptcy should be allowed for anyone under any circumstances."

My point and question have nothing to do with bankruptcy. My point is to illustrate the difference between responsiblity and wisdom. My question asks about the wisdom of the scenario set forth in the question.
55 posted on 01/15/2009 6:54:10 PM PST by gpk9
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To: gpk9

They not only made a bad decision that they should have to live with and pay in full but not making at least a 20% down payment they aren’t even home owners, they are squatters on real estate.

When I bought my first home, which I still own after 43 years, you had to put 20% down or you didn’t qualify for a loan.


56 posted on 01/15/2009 7:00:20 PM PST by dalereed
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To: blam

>>Wait till the food riots begin.<<

I agree. How soon do you think it will happen?


57 posted on 01/15/2009 8:30:32 PM PST by unkus
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To: Jeremiah Jr; Diego1618; freema
More news you can use.

Bank stocks plunge on fresh insolvency fears <<<

Bank of America shares fell as much as 28 percent -- dropping to their lowest level in 18 years --

And...

UPDATE: Bank Of America: 'Large Grp' Of Workers On NYC Plane

That's some bailout.

58 posted on 01/15/2009 8:35:11 PM PST by Ezekiel (Inauguration of Desolation)
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To: gpk9
Great video. We should have been giving money to the banks that were doing good !. Very tragically funny stuff. Discovering that anti-capitalistic behavior only prevents recovery and that rewarding failure will never prevent failure. Who had been educating these people ? Must have been leading sheltered secured lives all funded by debt or trust funds. No cash capitalistic reality at all. Out here on the Streets of Reality we always knew that they were Throwing Good Money after Bad. And that don't get you anything but more bad. Oh well. Time for more popcorn and more shotguns shells.
59 posted on 01/15/2009 9:05:03 PM PST by justa-hairyape
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To: gpk9
"But what if said home was purchased at an overly-inflated price in an overly inflated market, with no or extremely low down payment, and said overly-inflated market has since collapsed, and said home is now worth far less than the balance on said mortgage?"

How long have you know that you can't get something for nothing? I have no pity...assuming that's what you meant.

60 posted on 01/15/2009 9:06:35 PM PST by blam
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