Thursday, December 3, 2009

12/03/09 Midday Report: BAC does not need your stinking funds (well at least not until next time)

The market is abuzz today with BAC's repayment of $45B to Uncle Sam who apparently got drunk and touched BAC in their loan loss reserves just one too many times.  So to break the cycle, BAC is going to pay back their bail out funds through the profits they made by being able to borrow from said Uncle Sam at 0% and lend for more than 0% and then have Uncle Sam bail them out should those more than 0% loans go bad.  Honestly, that is the best business model ever created, even better than the Brooklyn Decker kissing and rim job booth.

But it gets better.  BAC is going to repay some of their bailout funds by issuing $18B of securities which should be great for the current shareholders since issuing securities isn't dilutive or anything, right?  Why else would BAC have opened up 6%?  Oh wait, issuing equity will lead to substantial dilution on the order of 10% to 15% (according to street analysts who may be right or wrong depends on the coin flip).   So this all makes perfect sense.  All companies need to do in this market is fuck up really badly, get coddled by good old Unky Sam, and then fuck their shareholders over and over again until their balance sheet is completely flaccid.  After this, their stock should shoot up at least 6%.  Makes perfect sense, just like intelligent design (spindle cells be damned) or Tori Spelling's face.

In other market news, Comcast is buying NBC so now not only will NBC have shitty programming, but their customer service will suck too.  But hey, this deal is synergy-istic and synergies are what the business world is all about.  Just ask Time Warner and AOL or this guy.  

As for our daily job report data, the service industry saw jobs contracting but initial jobless claims fell unexpectedly.  So our economy is getting worse and it is getting better at the same time, it's like Schrodinger's cat.  Is the cat alive, is it dead, or does anyone fucking care (and who put the cat in the fucking box anyway? Do I need to sick PETA on this Schrodinger fellow?)  So depending on what data you view as most representative, we are either fucked or slightly fucked, take your pick.

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