Bank of America's Lewis: Recovery is Nigh!
Yeah, ok, Ken Lewis. Sorry, buddy, but by my calculations you've still got another 4 or 5 ounces of flesh to go.
Jacksonville Business Journal:
The U.S. may pull out of the Great Recession at a faster clip than many anticipate, Bank of America CEO Ken Lewis said Tuesday.
“There is a potential for a rebound that beats the forecasts,” Lewis said at a Bank of America Merrill Lynch conference in Tokyo.
The head of the nation's largest bank pointed with optimism to low inventories held by businesses, higher personal savings rates and signs of recovery in the nation’s housing market.
But Lewis’ view is far from unanimous.
San Francisco Federal Reserve Bank Janet Yellen said Monday in San Francisco that she worries the traditional V-shaped recovery seen after U.S. recessions occurring since World War II might be more of a U-shaped recovery. [U as in U R trippin, Janet, we'll be lucky if we get a W but I'm banking on seeing a WTF-shaped recovery meaning KAPOW, there goes the house of cards...]
Lewis, on the other hand, observed that the nation’s deep recessions are usually followed by “strong recoveries and strong job growth in the first year of recovery.”
But Lewis also warned that banks’ loan losses traditionally pile up even as the economy moves into recovery.
That point was echoed Tuesday in a report on BofA (NYSE: BAC) by analyst Dick Bove with Rochdale Securities.
“The near-term problem is clear: Unemployment remains high,” Bove said. “Charge-offs remain quite high and appear to be rising.”
Bove added: “The bank will have marginal earnings or possibly losses in the third and fourth quarters.”
LOL "marginal earnings" huh? Are we excluding writedowns and credit card defaults?
Pfft. Never trust an analyst, especially one named Dick.