Bank of America CEO Brian Moynihan was on Bloomberg this morning talking about the U.S. Consumer and his company. He mentions that Bank of America is past the stage of capital concerns, and now the issue is earnings. There are about $2 Billion of additional mortgage related expenses per quarter that will ease over time, which should provide a substantial pickup in net income. It’s rare that you get the opportunity to buy this strong of a franchise at 50% of book value, and about 70% of tangible book value. If the Federal Reserve allows Bank of America to buyback any stock after the capital evaluation, the impact would be huge. I’d like to see BAC settle with MBIA as that is also an overhang to the stock, but they seem to be adequately reserved for the matter.
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