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Here is a question for our money experts...... Is it time to buy banking stocks such as BofA which a year ago was at about $42 and is now in the $3-5 range? Will the big banks eventually come back making these stocks a bargain or is there no hope and banks such as BofA will be taken over by the feds? If taken over, what would that do to the stock?

I ask this question because back in November I was having a conversation with an architect I work with who's investing advisor told him to buy BofA once it dropped to $20 (it was around $28 at the time). I didn't buy but I've been watching it slide ever since....

Bank shareholders are facing the prospect of pretty serious watering down of their positions. In a pure nationalization, equity should go to zero, but under the current partial buy-ins, the percentage of ownership controlled by the existing equity is just getting cut and cut and cut. In the short term, BofA and Citi really can't survive without the gov't investment. In the long term, 35x leverage is done. So, there are serious profitability questions in the long run. Give BofA a 6PE 18 months ago and you'd have a price in the range of $9 now triple the ownership base and you have a stock price of $3 for BofA.... In good times. I'm staying away for now.

I bought BofA stock last week. I think its worth the risk. Unlike others that have gone under, BofA has assets.

Ken Lewis again reiterated today that BofA is in far better shape than most rivals and doesn't need more gov't help. Given Sarbanes-Oxley, his statements can't be completely dismissed. The spotlight is on CEO Lewis and outright lies in this climate could mean serious jail time.

If shareholders at BofA don't suffer further watering of their stock, then getting in around $4 may play out very well. Just don't risk the farm!

For a long time I've thought the survivers should do well, but I worry about the regulatory backlash preventing anyway to make profits in the financial sector.

I think I'd wait to see what Bill Gross has to say:

http://www.bloomberg.com/apps/news?pid= ... PaBWecY2wo" onclick="window.open(this.href);return false;

Steve Ekstrand wrote:I'm staying away for now.

Okay NOW it's time to buy shares..............of Citibank! I mean $1 effing dollar??? What is the world coming to!!!
It's like Beirut out in the financial landscape

http://money.cnn.com/2009/03/05/news/co ... 2009030511

Quick! Buy now before it goes to ... zero? This is your last chance to lose money on Citibank? ;)

Pretty amazing tho'.....from $57 a share to $0.99 today ... I wonder what's going to happen with the Citi Mastercards that I have ...

Reijo

They're desperate ... yesterday they (BOA) offered to drop my credit card interest rate to 4.25% (don't ask )

Citi might too big to fail, but its not to big to wipe out shareholder equity.

Welcome to "Catch a Falling Knife!" The object is to buy the distressed stock of a former power-house company and not lose all your money when the Chapter 11 if filed.