Bank of America Corp (BAC)

Tenki2009 (31.62) Submitted: 2/25/2009 1:19:33 PM : Start Price: $3.58 BAC Score: -286.27

Losses from the acquisition of Contrywide and Merryll Lynch are still not uncovered fully and will haunt BAC for some time to come. Despite Lewis' pledge that no more bailout money is needed, we'll see BAC come back to the government within the next couple of months as more losses are being exposed. Losses from Contrywide's loan portfolio and Merryll Lynch's mortgage related investments are going to increase as long as the real estate market keeps declining and so far there hasn't been any indication that there's a bottom in the real estate market in sight. Also, BAC has a rather large exposure to commercial real estate mortgages. The real estate mortgage market is showing signs of distress and will continue to decline for many more months as many commercial real estate property owners - owners of shopping malls, strip malls, franchise shops, etc. - will have trouble making the payments on their loans, in particular ARM loans that are going to adjust in the near future. Furthermore, BAC is not able to attract the number of depositers it needs to establish a necessary cash base. Many people are afraid of leaving their money with large but endangered banks and are moving to regional, smaller banks that have not been as exposed to risky investments and that are - or at least appear to be - more stable in the current environment.