Bank of America just can't catch a break despite trying to do things right. Just after raising $3B in capital to keep their TARP buyback promise, they've agreed to a $3B writedown to buy back bad loans. About $2B of that will impact the bottom line, so kudos to BAC for figuring out how to mitigate the damage with creative accounting.
That's the good news. The bad news is that BAC lost over $7B in Q3 last year, mainly because of over $10B worth of nonrecurring charges. This doesn't help get them out of that hole.
I have a funny feeling that bad loan buybacks are the kind of "nonrecurring" charges that will keep recurring for many big banks throughout 2011.
Full disclosure: No position in BAC.
That's the good news. The bad news is that BAC lost over $7B in Q3 last year, mainly because of over $10B worth of nonrecurring charges. This doesn't help get them out of that hole.
I have a funny feeling that bad loan buybacks are the kind of "nonrecurring" charges that will keep recurring for many big banks throughout 2011.
Full disclosure: No position in BAC.
