Thought on Bank of America

I don't have a position in Bank of America. Frankly, it is a royal mess and you have a better chance of being an art major and understand the egineering intricacies of a NASA space ship than you do being a financial analyst and understand the intricacies of Bank of America or Citigroup. Don't believe me? From the Citigroup conference call.

"[T]he HAMP program right now ... really makes it difficult for anyone from the outside [of Citi] to actually have a good view as to the inherent credit profile in our [mortgage] delinquency buckets."
Citi CFO John Gerspach, Oct 15, 2009

Anyway, I am getting off topic. As bad of a mess Citigroup is, Bank of America may be worse. Two horrific mergers, Countrywide and Merrill Lynch mean not only can analysts not know what is going on inside the company, I would guess Bank of America management does not know what is going on in Bank of America.

Than you have this whole Ken Lewis, CEO of Bank of America. "Retiring" at the end of 2009, without pay, facing civil and possible criminal charges after Hank Paulson and other U.S. government officials have left him to the wolves. Fine, old story, Paulson should probably be facing charges also.

What about the new CEO? This is where it gets interesting. All the banks are playing games. Massive accounting and delay games. If your a new CEO coming in, do you want the old baggage? Wouldn't you want to give yourself some leeway room? Ahh, I would guess you would and considering how much of a mess Bank of America is, well there maybe need to do some serious house cleaning. This was the first earnings "miss" by a big bank. I am not sure Ken is helping out the new CEO. It just may have been that bad. But the new CEO for the 4th quarter and 1st quarter may want to sandbag earnings?? It will be easy to blame on Ken Lewis. Your the new captain but not your fault the ship is a wreck. You could be talking about a massive loss in the next couple of quarters. Bank of America has been Wall St. most messed up beloved darling. It has a long way down if the confidence is shaken.