1. Finance

    Does Bank of America Need a Bailout?

    Bank of America Corp. signage is displayed at a branch in Times Square, New York, U.S., on Wednesday, Aug 10, 2011. Bank of America Corp. and Citigroup Inc. posted new declines as U.S. lenders resumed their slide, pushed lower by concern about Europe's debt crisis and a weak domestic economy. Photographer: Guy Calaf/Bloomberg via Getty Images

    Guy Calaf, Bloomberg / Getty Images

    Bank of America’s share price is hovering around $6; could another bailout be around the corner? Henry Blodgett suggested as much in a blog post Tuesday, noting that “the market doesn't believe Bank of America's assets are worth anything close to what Bank of America says they are worth.” Bank of America replied with a statement denouncing Blodgett’s “exaggerated and unwarranted claims”—and noting the fact that the SEC banned him from the securities industry. But J.P. Morgan, while not speculating on the likelihood of future bailouts, seemed to second Blodgett’s assessment, noting in an analysis that “[T]he pressure from the credit and equity markets is at a point that is increasingly hard for management [at Bank of America] to ignore. We think this may actually increase the chances of a credit-positive development, such as a capital raise.” The view on Wall Street, DealBreaker notes, seems to be “the news is so bad it’s good.”

    Read it at DealBreaker