Home » Bear Case Scenario » Bank of America Possible Black Swan Scenarios $BAC, $C, $JPM, $XLF, $WFC, $HSBC, $TD

Bank of America Possible Black Swan Scenarios $BAC, $C, $JPM, $XLF, $WFC, $HSBC, $TD

Bank of America is about to release earnings. Ponder these Black Swan Scenarios:

Bank of America managed to survive the stress test for now. This bank is still a wounded puppy. 2008 legacy issues either manufactured in-house or acquired still abound. A massive cost cutting exercise is underway, but cost cutting on its own is rarely successful. Regulators have not finished looking at this one just yet and may create new surprises in the future.

Most banks do well in a rising interest rate environment. But how many of their cross sold customers can handle a 35 increase in mortgage carry and still make payments on time.

Cost of capital is years away from being covered.

George Gutowski writes from a caveat emptor perspective.

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