The About page talks about BofA’s history, starting with the 1906 San Francisco earthquake:

One century ago, a resourceful Italian immigrant named Amadeo Giannini rescued the meager deposits of his fledgling bank from the fires that followed San Francisco’s most legendary calamity, the earthquake of 1906. Days later, with most other banks in ruins and unable to open their vaults, Amadeo was making handshake-guaranteed loans to desperate San Franciscans from behind a makeshift desk on the waterfront. Our bank was thus born of one of the most notorious disasters in history. Soon, your bank will rise from the ashes of a new catastrophe — this one of human origin.

It then goes on to describe’s BofA’s “too-big-to-fail” status, leading to the moment when BofA’s problem becomes your problem. That is, guess who gets to bail them out?

You are soon to play the role of pilot, passenger, and rescuer of the mighty craft that will soon be your Bank of America. It is on your shoulders to act decisively, and it is on your gut to rebuild the bank of your dreams.

The best part is this supposed message from CEO Brian Moynihan:

Today, it’s time to acknowledge that our Bank isn’t working anymore—not just for the market, but for people, our real customers. We’ve paid $8.58 billion in relief to borrowers and $3.24 billion in fines. We face lawsuits and claims from citizens, companies, and state and local governments. There is even a petition with the Federal Reserve to break up our bank, adding yet more uncertainty to our position….
As a result, our company’s shares have fallen precipitously, and now trade at one-fifth their 2008 price. Our Bank may, in fact, soon need help keeping afloat—and much as in 2008, you, the American taxpayer, will be asked to provide that assistance.
The institutions you rescued in 2008 have continued much as they always were, engaging in the same practices that brought our economy so close to collapse. To make sure that this time around, things turn out differently, we at Bank of America are launching a forum in which you, the American taxpayer, can prepare for the time that you own us. By sharing ideas, and reading and rating the ideas of others, you can begin charting a course for this Bank—your course.
Welcome to your Bank of America.

Oh man, this is priceless stuff.

There’s even a fake PR announcement.

More on the spoof at BBJ and YesLab

Even the supposed denunciation of the hoax by BofA was, itself, a hoax. Brilliant.

YourBofA.com was created by Yes Lab, Rainforest Action Network, New Bottom Line, and some people from Occupy Wall Street’s Alternative Banking working group.

The site allows you to get creative and make your own ads for BofA, which of course results in LOLs like this:

Then there are those not quite safe for work.

Recently, BofA reported a 68% drop in earnings on a 17% decline in revenue. It’s profit was $653 million, earnings were 31 cents a share, which still beat estimates (which were 12 cents/share). The bank had to undergo a $4.8 billion pre-tax accounting charge connected to a change in the value of its debt. (source: WSJ)

BofA is currently trading around 8.77 per share.

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The FED performed its annual stress test (required by the Dodd-Frank law) on 15 19 banks and 4 of the banks failed the test. These 4 banks are Citigroup, SunTrust, Ally Financial, and MetLife. The FED stress tests suggest that those banks would not have satisfactory capital buffers if they were to suffer a financial shock. The numbers (Tier 1 common capital ratios):

• Cigitroup: 4.9%
• Ally Financial: 4.4%
• SunTrust Bank: 4.8%
• MetLife: 6%

Citigroup performed the worst in this test. CEO Vikram Pandit is sure to be all stressed out over it, poor guy.

Still, most other banks passed the test, which helped the market (which seems to be made of teflon these days. We’re sure that will last…)

For more, go to: Bloomberg and CNBC

Specifically, Bernanke gave a speech titled “Housing Markets in Transition” where he discussed the current problems in the real estate market, which everyone knows sucks.

After listening to his extremely boring speech, I would have to say I would have respected him more if he just went up there and said “The housing market just plain sucks,” and then hit the Orange County Convention Center food court.

Let’s take a look at the prepared speech, which he followed pretty closely:

Though some progress has been made in reversing the losses in jobs and income sustained during the recession, the pace of expansion has been frustratingly slow and the unemployment rate remains very high by historical standards. The state of the housing sector has been a key impediment to a faster recovery. In the typical economic recovery, a resurgent housing sector helps fuel reemployment and rising incomes. But as you know all too well, that scenario has not played out this time. Homebuilding remains depressed in most areas, relative both to where it was before the downturn and to where it will need to be to meet the needs of a growing population in the longer term.

Tell us something we don’t know, Benny.

About 1-3/4 million homes are currently unoccupied and for sale, up dramatically from the first half of the 2000s, when readings of about 1-1/4 million vacant homes were the norm.

He goes on to state that in Florida the homeowner vacancy rate for the 3rd quarter 2011 was 3.2% (higher than the national average of 2.4%). What about foreclosures? Do you have good news, Ben?

Looking ahead, the relatively high rate of foreclosures is likely to continue for a while, putting additional homes on the market and dislocating families and disrupting communities in the process.

Oh, daym. Well, what’s the holdup?

A number of factors are constraining demand. High unemployment and uncertain job prospects may have reduced the willingness of some households to commit to homeownership. Availability of mortgage credit is an important constraint. Additionally, housing may no longer be viewed as the secure investment it once was thought to be, given uncertainty about future home prices and the economy more generally. House prices have plunged about 30 percent in nominal terms from their peak and nearly 40 percent in inflation-adjusted, terms. The imbalance of supply and demand has also been reflected in the decline in home construction.

Hmm, Ben, this is stuff that a high school kid would put together for a speech class assignment. None of this is news. (Although I’m slightly shocked that you would admit the part about housing no longer being a secure investment!) Now’s the part when you earn your speaking fee, right?

Rental markets around the country have strengthened somewhat. Vacancy rates for rental properties have declined, rents have been increasing and the construction of apartment buildings has picked up.

Right. So, after that, Ben continues stating the obvious negative effects – loss of construction jobs, lowered values of homes because of the foreclosures around them, increases in crime because of lower quality of life in neighborhoods, depressed tax base, vicious circles, loss of wealth, less consumer spending, no health care or college educations. Check, check, check. Then Ben states even more obvious facts: the recovery has been so slow because

• Constraints on mortgage credit – credit has retracted about 13% in real terms. Lending instititions have tightened their underwriting conditions dramatically. “For example, mortgage originators appear to be reluctant to extend credit to some potential borrowers who could meet the underwriting standards currently set by the GSEs. Fewer than half of lenders are offering mortgages to borrowers with a FICO score of 620 and a down payment of 10 percent, even though such loans could be within the GSE purchase parameters.”
• private-label mortgage securitizations have “virtually disappeared”
• Lending to potential first-time homebuyers has dropped “precipitously”

Basically, what Ben is saying here is that lenders won’t lend. They’re terrified. Well, why shouldn’t they be? What would they get out of lending anyway? High rates of return? Yeah, right, Ben has taken that away well into 2014.

Ben seems to think that the “pendulum has swung too far the other way” in regards to extension of credit.

Well here’s one solution that Bernanke has been pushing to help solve the housing market problems: REO-to-Rental programs.

With home prices falling and rents rising, it could make sense in some markets to turn some of the foreclosed homes into rental properties.

He mentions REO-to-Rental more than once. The other thing he talked about was “land banks” for homes in poor condition:

Land banks are typically governmental entities that have the ability to purchase and sell real estate, clear titles, and accept donated properties. Properties may be rehabilitated as rental or owner-occupied housing or, in extreme cases, demolished.

Closing with more platitutes, Ben says:

“We need to continue to develop and implement policies that will help the housing sector get back on its feet. No single solution will be sufficient. But sustained efforts to address the many interlocking factors holding back the housing market will pay dividends in the long run.”

But other than suggesting that banks should lend more, or that they should basically turn into slumlords, I didn’t hear a lot of detail. Even a Q&A that brought up a recent white paper revealed that said white paper was only meant to “make people aware of how central to the recovery housing is.” (applause from crowd) and not to offer any specific recommendations.

When asked about potential setbacks, Ben talked about Europe’s problems, not getting our own fiscal policy in order (applause from crowd), and then unanticipated events (like Japan’s disaster last year or political upheaval in the middle east, something Ben referred to as “unknown unknowns.”)

All in all, Ben’s housing market speech was well received by the IBS crowd, that is – those who didn’t fall asleep. But if you were looking for any suggestions for fixing the housing market problems, besides everybody just turning their homes into rentals, then look elsewhere. I’m happy that Ben was at least able to enjoy our nice Orlando weather.

-Bill

Executives at the Charlotte, N.C., financial giant put the potential move on a list of emergency scenarios submitted to the Federal Reserve last year. While people close to Bank of America insist that no retreat is imminent, even the possibility of selling branches and losing customers it spent huge sums to lure underscores the depth of its problems.

The article goes on to talk about BofA’s current and past problems. Back in the late 90s/early 00s, the bank went hogwild, extending into every corner of the union. It suffered greatly when the housing crisis hit and our economy went off the cliff. It didn’t help matters that then CEO Ken Lewis pushed through Bank of America’s purchase of Countrywide Financial. Good one, Lewis. Hey, at least you didn’t preside over the AOL/Time Warner fiasco, right? (Ken should put that on his resume: *not responsible for the AOL/Time Warner merger). BofA’s problems continue today, with its share price declining over 50% within the past year. J.P. Morgan recently took away their crown for largest bank by assets.

Current CEO Brian Moynihan also has a plan to sell shares tied to the performance of Merrill Lynch, which BofA picked up in 2008 and is doing way better.

The drastic moves would be seriously considered only if Bank of America needs to raise more capital to cushion itself from mortgage woes and other turmoil. Mr. Moynihan, other top executives and directors of the sprawling bank are grappling with scenarios that were unthinkable even during the worst moments of the financial crisis.

Whatever will we do if Operation GTFO is put into motion? Where will we bank for exorbitant fees? We shudder at the thought of going to credit unions. They just seem too nice if you ask us.

Because figgy pudding just doesn’t taste the same when you have to eat it out of a can, on a street corner, while huddling around a garbage can full of burning newspapers for warmth, a moratorium on foreclosures has been announced until the end of the holidays:

Fannie Mae and Freddie Mac will not foreclose on any homeowners between December 19 and January 2, according to statements on their web sites. Private mortgage providers, such as JPMorgan Chase, Wells Fargo, and Bank of America, also said they plan to suspend their evictions during the holidays, according to CNNMoney.

They’re not pausing any of their legal proceedings – just the actual act of booting. Which we suppose will allow for at least a few homeowners to eke out a few additional plasma donations or hock a few additional possessions to keep the wolves at bay, though most are likely so far in arrears that the additional time won’t help very many people. (Currently, a record-high 4.29% of homes are with active mortgages are in foreclosure, or just over 1 in 25.) But, hey, at least when you go to Mom and Dad’s for Christmas you won’t have to show up on their front porch with a U-Haul. You can save that for the week after New Year’s.

If you click through the link, HuffPo has a slideshow of some of the more interesting foreclosure fails of the year, including Bank of America foreclosing on its own branch office, foreclosing on someone who made a payment too early, threatening to foreclose on a man over an unpaid bill for $0, etc. (Interestingly, most of the items in the slideshow are $BAC-related.)