Tuesday, December 20, 2011

Bank of America too Big to fail?

(Reuters) - Bank of America Corp (NYSE:BAC) shares closed below $5 on Monday for the first time since March 2009 amid continued concern about its need to build capital.
The stock closed at $4.99, down 4 percent, after dropping as low as $4.92. The shares have not closed below $5 since March 11, 2009. end quote from:http://finance.yahoo.com/news/bank-america-shares-close-below-004456439.html

This is very concerning for anyone in the Western World. Because of the undercapitalization of Bank of America during these times it makes it a more risky bank because of this and one also remembers MF Global and Lehman Brothers. However, the potential collapse of Bank of America if it doesn't recapitalize more will be troubling in a whole new way if Bank of America enters a Chapter 11 in the next 1 to 5 years or just suddenly ceased to exist like Lehman Brothers or MF Global. I'm not sure what the consequences would be if this happened, but if it happened it might make what has happened already since 2008 seem sort of like a picnic in comparison.

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