It’s really worse than BAC’s management wants the public to know.
The realization of how deep this situation is for BAC really stunned me. I realized BAC can’t “make” $3B per Q and have “put-backs” of the same or more per quarter and still pay shareholder dividends or show any stock growth. I must refer you back to Q3 of 1010 and Q4 of 2010 reports and the put-backs they had made. In Q3, 2010, they made $3B and their liabilities were something like $10.6B. It was estimated their share of total liability is some $69B USD and at a $3B per quarter income and sustaining a $3b per quarter loss, that’s 11 1/2 quarters or something over two and a half years’ of losses. For Q4 of 2010, FMa and FMc hit BAC for some $2.8B wiping out almost ALL of that quarter’s profit. If all BAC’s liabilities for put-backs are forced by litigation and come due at once, they are toast - a burnt offering.
My numbers may be a little off, but the evidence points to eventual “receivership” without QE ad brokeum.
I see what your saying I guess I thought because BOA put Billions aside for put backs and they were allowed to screw the taxpayers through Fannie for a penny on the dollar on $117 Billion worth of toxic loans they were now sitting a little better.
“But how sharp is Freddie if all it can do is squeeze a $1.28 billion payment out of a giant customer in exchange for relinquishing fraud claims on $117 billion worth of outstanding loans? The very best its million-dollar executives can do is claw back a penny on each bubbly subprime dollar?”
http://finance.fortune.cnn.com/2011/01/03/is-fannie-bailing-out-the-banks/