Recap of Today's BofA Drama; BAC Blames Henry Blodget For Stock Sell Off

Source: Flickr
Today was somewhat interesting for Bank of America, BAC analysts and financial bloggers. Below is Bank of America's press release (via WSJ's Market Beat) blaming today's stock sell off on Henry Blodget's blog post. Bank of America should explain why its credit default swap spreads (insurance premiums on its bonds that trade over-the-counter) are near record highs.

"Mr. Blodget is making “exaggerated and unwarranted claims,” which is what the SEC stated publicly when he was permanently banned from the securities industry in 2003.

The sovereign exposure is off by a factor of 10.

The commercial real estate figures are off by a factor of four.

The mortgage analysis was provided by a hedge fund that has acknowledged it will benefit if our stock price declines.

The blogger’s recommendations on goodwill accounting would be prohibited by generally acceptable accounting practices.

Traditional bank valuation relies upon tangible book value per share, which excludes by definition 100 percent of goodwill and other intangibles. As of June 30, our tangible book value per share was $12.65."

These posts supposedly moved BAC today. Did they move BAC's credit default swaps as well? (lol)

  • ANALYST: Bank Of America's Bizarre Personal Attack On Henry Blodget Suggests "Something Is Seriously Amiss" (Rich Eckert of Second Derivative Research) - Business Insider
  • Henry Blodget: Oh My Goodness: Now Bank Of America Is Blaming Its Collapsing Stock On ME - Business Insider
  • Henry Blodget: It's Time For A New Kind Of Bank Of America Solution—The Right Kind - Business Insider
  • Henry Blodget: Here's Why Bank Of America's Stock Is Collapsing Again (needs $200 billion!) - Business Insider
  • Why is Bank of America’s Stock Cratering Yet Again? It’s the Extend and Pretend Endgame - Naked Capitalism
  • Some Follow Up Questions (And Recommendations) For Brian Moynihan - Zero Hedge
  • Bank Of America Scrambles To Defend Itself From Henry Blodget's Allegations It Is Massively Undercapitalized - Zero Hedge **
  • Visualizing How Bank Of America's Reserve Accounting Errors Are One Giant "Subprime CDO " - Zero Hedge

Other analysis:
  • BofA Has ‘No Reason’ to Raise Capital: Dick Bove - Bloomberg
  • The Debate: Will Bank of America Have to Sell Fresh Stock (Jeffries Derivatives Analyst) - WSJ Deal Journal