You can blame all this on Obama for stoking up fear in the market by escalating the Ukrainian crisis more than what it is. I mean who cares about Russia invading Ukraine and how does that affect your average Joes in the US. The market is now in a fear mode that the 10-year yield (bond) is heading downward from increasing demands for safe haven, so banks such as BAC are not profiting from rising interest rates.
I don't know why you bring up an old news (Nov 7, 2013)
BofA Said in Settlement Talks Over Credit-Card Products
By Carter Dougherty November 07, 2013
Bank of America Corp. (BAC:US) is negotiating with the Consumer Financial Protection Bureau to settle allegations it deceived customers in the sales of credit-card add-on products, according to two people briefed on the talks."
Accordingly, we'll get a slight hit on Q1-2014 but will still be in line with Q4-2013 earnings. Any major settlement that includes BoFA+CountryWide+Merrill Lynch as a one package is very positive for BAC.
It has been reported that there are 51 US Congressmen that are investing in BAC and I will bet most of them are GOP. It's the way Obama and his minions punishing the GOP just like with the IRS.
I have also unloaded 152,000 ALU shares back in Nov-Dec that I've paid $1.00 and made over 310% profit. I still have 48,000 shares left and they will be unloaded in January 2015 for tax purpose. I made the right decision and unloaded ALU at the right time when the market was begining to get skittish and switch my investment to a Blue-Chip stock with the highest potential (BAC). So far I have made +18% gains on those BAC shares from the proceeds of ALU.
I think it has to do with traders. Whenever Citi gets oversold (declined more than others) as in the past few days BAC performs better overall. Conversely, whenever Citi recovers from a sell-off BAC seem to drop more than the others. This suggests to me it's the same traders hopping between these two stocks.
Where did you fnd in ALU website that mentions the proceed from the RI sale on behalf of ADR Holder is a dividend?
In the ALU website, they do state that the Rights Issuance of November in respect to tax reporting and pertaining to IRS as:
US Form 8937
U.S. tax rules impose certain reporting obligations on issuers of “specified securities” that undertake organizational actions which affect the tax basis of U.S. shareholders in such securities. Alcatel-Lucent has prepared an IRS Form 8937 for its US shareholders with respect to the company’s stock rights offering, and will keep the form available on its website until January 2023 to satisfy these U.S. tax reporting rules.
The average opening price of the Rights during the Subscription period was determined to be E0.166 ..
Accordingly, using the fair market value of the Rights as determined during the Subscription Period, each U.S. Holder that makes this election must allocate 5.37% of its basis in its ordinary shares to the Rights and reduce its basis in its ordinary shares by an equal amount]
Since the Rights that belongs to ADR were sold at E0.166 (regardless of whoever sold them) it would still be considered as a capital disposition which falls under the category of capital gain/loss.
I believe you're correct. I've discussed this topic with the tax department that handles capital gain and dividend. He explained to me that a reduction in nominal value whereby a company returns a portion (sale of RI) back to shareholder is considered either a "capital gain" or "capital loss" depending on your initial book-value of what you've paid and the change to the book-value after the reduction to its "nominal value". The difference will determine whether it's capital gain or loss.
To my knowledge the Judge is scheduled to hold a hearing on Feb 19 regarding the "home loan modification". I suspect the Judge may remove the amount of "loan modification" from the $8.5B so the settlement on the rest can proceed. I think the "loan modification" will get re-examined by BNY trustee as a separe settlement or perhaps gets litigated separately.
One of the biggest problem I''ve seen with retail investors is that they just can't pull the trigger to exit. Some people would sell to capitalize on their gains while others like myself prefer investing strategically based on risk and de-risk on market condition and outlook. Those that slam anyone for selling as a basher are really unsophisticated investors themselves who prefer to ride a stock to its grave (rain or shine).
I don't think that's silly at all. The best way to make money in stocks is through momentum by betting big. At one point, I had 200,000 shares which I've bought at $1/shr. I sold 80,000 shares last year at $3.92 followed by 72,000 shares in January at $4.30. I still have 48,000 shares which I'm holding until 2015. It's call "risk" and "de-risk" by playing the momentum.
The Judge left out an "exception" which means it wasn't a clear-cut decision so that gives AIG more ammunition to drag this thing out. I think that's why the stock didn't go up. What do you expect from a NY liberal Judge! I've noticed that Obama and the Feds have not prosecuted any individuals that were directly responsible for the financial crisis instead they have taken the path to recover the money (more like robbing) from banks' shareholders through various unimaginable lawsuits and fines. Enough is enough!
I've read somewhere that over 92% of the settlement (in value) has agreed to settle. I don't believe the Judge can dismiss when it's such a high number in favor.
The $2.1B is just a drop in the bucket for BAC since they have $131B in cash, and after all JPM paid $13B on theirs. Everyone is waiting for the decision on the $8.5B settlement approval which should be arriving in the next few days as announced by Judge Kapnick's office, and then the PPS should rise to $18-$19 and that's why BAC has been holding its price during this down market. BAC has been the best performer of all financial stocks since YTD. I was lucky to get in on BAC at $5.60 back in late 2011 right after Buffett's investment. Ever since then I have been accumulating BAC shares where it now represents 87% of my portfolio. Wall Street is projecting BAC would be paying $1.47 per share in dividend by 2016 and would likely perform at the same level or better than JPM by that time, and that is why Cramer loves BAC with his endless promotion.
Citi is down by -1.9% while BAC is up +0.24%. Seems to me Citi's investors are selling theirs and coming over to BAC in droves. Perhaps, they are expecting a windfall with the possible upcoming Article 77 approval.
I was actually referring to T going after VZ's subscribers (not the company) after poaching TMUS subscribers. I think T needs to take out TMUS before TMUS complete its merger with Sprint, otherwise T will become No.3.
I think you are right about Turkey. The currency crisis of EM is beginning to settle down which means there will be less capital flight to US Treasury and that should benefit BAC on higher yield curve. The Fed will also taper another $10B tomorrow as the market is expecting and that should also raise the yields higher as well.
I think AT&T actually has the right strategy. To compete effectively against VZ AT&T using its massive cash reserves and capital to take out the weaker No.4 (TMUS) operator first through a campaign of poaching TMUS subscrbers right in the open. I would expect TMUS churn rate will become much higher in the next few quarters. Then, AT&T will go after VZ.
Rumors, that's an interesting point on FX hedging. In the Q3 reporting ALU seems to state that they do not hedge FX directly but they do have pricing model using Level 2 under IXFR 7 on currency derivative by using observable data on exchange rates (real time) as input.
[The Group’s derivative instruments are classified as Level 2, as they are not actively traded and are valued using pricing models that use observable market inputs (foreign currency exchange rates, volatility indices and interest rates).]
In Q3 (September 2013) ALU had a currency derivative liabilities of -47M Euro.
Does anyone know the payments on ALU contracts are being paid in US currency or with each country's local currency?
Many of these Emerging Markets' currencies are now crashing. With the negative exchange rates on devalued currencies of these countries I think this may affect ALU earnings and margins (i.e. the recent India Reliance contact that's worth $1B). ALU has also received numerous contracts from Argentina, Malaysia, Indonesia, Brazil, and others not too long ago.
[On Friday, the Argentinean peso posted its largest one-day decline in more than a decade, while other emerging market currencies, including the Turkish lira, the South African rand and the Brazilian real, also took a battering.
The selloff spread to emerging market currencies in Asia on Monday morning, as the Malaysian ringgit hit a fresh four-year low against the dollar, the Philippines peso hovered close to its four-year low and the Indonesian rupiah hit a two-week low against the greenback. Global stock markets also took a hit, leading to a sharp selloff on Wall Street's three major indices on Friday and across Asian equities on Monday morning.
The selloff has proven a stark reminder of the pain emerging market currencies saw last year, when the Federal Reserve's first mention of tapering sent the currencies of countries with large current account deficits, like India and Indonesia, tumbling to historic lows.] -cnbc