Friday, February 20, 2009

Want to read something scary?

"Gone in 60 Days: Citi and Bank of America Won't Live to See May." (HT: Across the Curve).

(It's scary because these are the largest banks in America. Over half of Americans are connected to these banks in one way shape or form).

"The US government has already committed half a trillion dollars to these two firms which is more than 10 times the amount it would cost to buy and control both companies. The market doesn’t believe that $500 billion is enough to save these companies.

All the kings horses and all the kings men can’t put humpty dumpty back together again.

Today both banks made fresh new lows with Citi closing at $2.51 and Bank of America closing at $3.93. The 1 year charts below show the short term price movements. You should understand that when a bank stock’s chart looks like this, even a HEALTHY bank would be in trouble. Nobody wants their deposits tied up in a company that trades at $2. The outflows of deposits from Bank of America and Citi must be catastrophic."

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