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To: Dale Baker who wrote (75982)	4/8/2009 11:51:03 AM
From: Feraldo	Read Replies (1) \| Respond to of 118717

Bank of America Needs $36.6 Billion, Oppenheimer Says (Update1) bloomberg.com By David Mildenberg April 8 (Bloomberg) -- Bank of America Corp., the largest U.S. bank, needs to raise $36.6 billion in equity to bring capital ratios in line with its peers, according to Oppenheimer & Co. With investors reluctant to commit new funds to lenders, Bank of America is more likely to raise capital by converting preferred stock to common, or issuing 5.2 billion shares through the Treasury Department’s Capital Assistance Plan, said analyst Chris Kotowski in a report to clients today. Under the Treasury program, Bank of America may issue shares for $6.24 each, the report said. Bank of America has already accepted two rounds of taxpayer support totaling $163 billion that included preferred stock purchases and asset guarantees. Chief Executive Officer Kenneth Lewis has said the Charlotte, North Carolina-based company will rebound from a fourth-quarter loss without more government assistance. “It is perhaps unusual to model highly dilutive equity raises into earnings forecasts, but we believe that in the current environment, until credit quality stabilizes and capital requirements are more precisely known, it is the prudent thing to do,” Kotowski wrote. Oppenheimer cut quarterly earnings estimates for Bank of America to 2 cents a share from 10 cents because of expected higher losses on credit cards and other loans. Among New York- based banks, JPMorgan Chase & Co. is likely to earn 16 cents a share, down from 29 cents, while Morgan Stanley may post a 59- cent loss, compared with a previous estimate of a 37-cent profit, Kotowski said in the report. He raised the profit estimate for Goldman Sachs Group Inc. to $1.29 from 99 cents. Doubling Bank of America’s ratio of tangible equity capital as a percentage of risk-weighted assets to about 6 percent would put the company in line with the 6.3 percent average of the 25 largest U.S. banks, Kotowski said.

To: Dale Baker who wrote (75982)	4/8/2009 11:53:05 AM
From: Keith Feral	Respond to of 118717

Everyone on the face of the planet now basically hates the banks, and the market caps are painfull small. Just like there was too much money chasing energy last summer, there is too little money parked in the financials today. Long term, the money will be there when the earnings begin to improve. Sequentially, everyone was still upbeat in 2007, everyone was in denial in 2008, and now everyone has accepted the problems behind the banks as self evident. It's the reverse of the bubble we saw at the top of the commodity bubble in 2008, when people accepted $150 oil as a self evident truth.