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I think there is almost zero chance B of A or Citi will be nationalized, for many reasons. In terms of what it would mean for Charlotte - I'm not sure if would make a big difference in terms of layoffs, etc which would happen either way. Where it would make a difference is the enormous dissolution of value for shareholders - and many employees and ex-employees, not to mention others in the community are B of A shareholders. Nationalization would wipe out much of the value that's left. The Obama administration said last week that they don't see nationalization as likely. I would agree since a bank the size and scope of a B of A or Citi would be impossible for the government to manage. IMO, the government can't manage the simplest things, let alone manage a bank's assets. And nationalization is way too politically risky for those in office.
Just my opinion, but I strongly believe that buying Citi at 2 bucks a share or B of A at 3.00 a share is a steal. 10 years from now when things have been "normal" again with the banks for several years, people will wonder why they didn't jump in at these prices. I don't work for the bank and not trying to sway anyone, but buying at these prices (for the long term) is something I am considering.
I believe this would involve convertible preferred stock . . . wh/ would put the government in the position of being the largest equity holder in BofA. . . and present stockholders in a subordinate position.
But I sure am no expert - just what I have ascertained and so I could be off base.
Hell, as much money as we've been throwing at them, they might as well be. And it doesn't look like the government will stop with the capital infusions anytime soon, although they don't seem to be working.
Really, the government should have just let them fail. It would have been painful and ugly in the short-term, but we'd be better off in the long-term.
I think there is almost zero chance B of A or Citi will be nationalized, for many reasons. In terms of what it would mean for Charlotte - I'm not sure if would make a big difference in terms of layoffs, etc which would happen either way. Where it would make a difference is the enormous dissolution of value for shareholders - and many employees and ex-employees, not to mention others in the community are B of A shareholders. Nationalization would wipe out much of the value that's left. The Obama administration said last week that they don't see nationalization as likely. I would agree since a bank the size and scope of a B of A or Citi would be impossible for the government to manage. IMO, the government can't manage the simplest things, let alone manage a bank's assets. And nationalization is way too politically risky for those in office.
Just my opinion, but I strongly believe that buying Citi at 2 bucks a share or B of A at 3.00 a share is a steal. 10 years from now when things have been "normal" again with the banks for several years, people will wonder why they didn't jump in at these prices. I don't work for the bank and not trying to sway anyone, but buying at these prices (for the long term) is something I am considering.
Sorry but I've got to disagree, nationalization is almost definitely going to happen. What's up in the air is exactly what "nationalization" is going to look like. Rest assured the gov't. is going to wipe out the remaining shareholder equity, and probably force some changes in upper management. The gov't is going to conduct stress tests in the next 2-3 weeks and once they have that info, then they will take action. Not to be doom and gloom, but that's just how it is shaping up. The effect on Charlotte could be severe if BofA is in the gov't crosshairs (which everyone agrees it is). Beginning with upper management shakeup, many of them live in Charlotte, the local economy will take another hit. Next, with the dissolution in shareholder value, the local economy will decline further still.
This would be a nightmare for everything that our country has always stood for and this would send the entire country into a deep, deep depression. However, this morning it looks like the new Administration is headed towards Nationalization...not good news.
Sorry but I've got to disagree, nationalization is almost definitely going to happen. What's up in the air is exactly what "nationalization" is going to look like. Rest assured the gov't. is going to wipe out the remaining shareholder equity, and probably force some changes in upper management. The gov't is going to conduct stress tests in the next 2-3 weeks and once they have that info, then they will take action. Not to be doom and gloom, but that's just how it is shaping up. The effect on Charlotte could be severe if BofA is in the gov't crosshairs (which everyone agrees it is). Beginning with upper management shakeup, many of them live in Charlotte, the local economy will take another hit. Next, with the dissolution in shareholder value, the local economy will decline further still.
I should clarify that by "nationalization" I meant a complete government takeover, essentially wiping out shareholders of common stock. There are varying degrees of nationalization, but when I said I don't believe there is a chance of it happening, I meant complete takeover of Citi and B of A, specifically.
This would be a nightmare for everything that our country has always stood for and this would send the entire country into a deep, deep depression. However, this morning it looks like the new Administration is headed towards Nationalization...not good news.
If you are correct, then watch for the stock market to fall off of the table when it opens this morning.
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