Home » Stocks » Bear Case Scenario Bank of America $BAC, $XLF, $C, $JPM, $WFC, $HSBC, $RY, $TD

Bear Case Scenario Bank of America $BAC, $XLF, $C, $JPM, $WFC, $HSBC, $RY, $TD

Bank of America is about to release earnings. Ponder the Bear Case Scenario.

The Board of directors has as yet to establish its bone fides as a bank board. Certainly individually they have excellent credentials. Many in highly regulated industries. Bank of America has not been tested by severe crisis. Until that time comes you cannot fathom the timber.

Interest rates will start to climb soon. It is often said that rising interest rates are good for banks. But if the borrowing customers start to tank that’s not good for BAC. The mortgage crisis is sort-of over or maybe it just got quiet. Pop the average home owner 3 percentage points on the mortgage payments and most home owners will roll over and default again. You cannot securitize your way out of that problem.

Ticking time bomb just like most consumer oriented financial institutions.

George Gutowski writes from a caveat emptor perspective.