Replies to post #4860 on Bank of America Corp (BAC)

[WID]

Dew:

I agree with you that BAC needs $34 b for new capital.

Here is my calcs to show why BAC needs $34 bil in new capital.

This is all based on a two BIG assumptions-- that BAC needs 34B more to get the TCE to where the government wants it AND the govt wants a 4.0% TCE minimum...

This is how I arrived at 4.0% being the percent that the govt requires

Here is the data on BAC

Tangible Equity is 2,384B

Current tangible Common Equity is 62B

Now the assumption that BAC needs an additional 34B according to the reports--

Therefore BAC needs 62B + 34B = 96B to satisfy the govt

Therefore TCE/TA ratio is simply 96B / 2384B = 4.0%

If the bank can raise capital by selling the assets such as CCB ($25 bil), Blackrock ($10 bil), etc... it should generate enough capital without convert the taxpayer preferred shares into common shares..

It is more positive to raise capital by selling assets than converting the government ps.

Let see how things come out tomorrow.

Best Investment!

WID

[KingofPennies]

DOWN, that's how. BAC off 10% so far in Pre-Market open.