BAC has billions in mortgages that are not current. If those are marked to market, instead of 100 cents on the dollar, BAC has a huge negative equity. Without all those commercial bank to bank bond deposits BAC is extremely illiquid.
Now that QE is over and the Federal Reserve is done putting it's bonds on deposit in BAC to make it liquid where exactly is BAC going to get new capital to make it liquid? Is BAC the 1st breakup in the To Big To Fail Breakup Plan? What is a broken up BAC going to look like?
Opium is what HSBC was founded on. The Opium Wars in China to be exact. HSBC is headquartered in the Square Mile in London, which is it's own City State. That means it doesn't have to disclose to anyone anywhere what it does inside The Square Mile. It's Swiss arm may have some trouble with disclosure, but notice no one is going after any accounts inside The Square Mile. There is wrinkle in the Opium trade, that is the Taliban. The Taliban are very anti drug and cutoff Opium once before, which is why you had to attack them after 911. Notice how many times the Taliban surrendered between 2001 and 2014. Now they're back.
Which is a big problem for HSBC and the rest of the banking world. Don't forget the Federal Reserve Corporation is headquartered in the Square Mile, HSBC is a Federal Reserve Member bank. No one is going to touch HSBC with anything major. For instance BAC has been insolvent since 2008 without Fed Funds on deposit at BAC. No one is complaining about that and it's out in the open. Why would the drug business be affected, no one is complaining about drug business or they would send troops in to correct it. Remember Noriega for instance?
How will the Federal Reserve keep this Member Bank alive without Billions in Federal Reserve Bond Deposits that were bought with QE money. The QE bank bail out is over. Will BAC survive without QE?
Commerz Bank and BAC both have lots of mortgage default loans, causing a negative balance sheet. The Central Banks ECB/Federal Reserve buy government bonds put them on deposit in Commerz Bank or BAC as member banks. Negative balance sheet fixed with Government Bonds on deposit from Central Bankerst. It is a real simple program. No gamble to it. It is very Bolshevik in nature. Since they were the 1st to use it on a mass scale.
QE is a bank bail out. The Euroland banks are very close to going under or the QE program would not be as big as it is. QE make banks LIQUID with the ECB or the Federal Reserve depositing their bonds into member banks. It is banking cartel fix. Not a social welfare program. BAC got billions in Federal Reserve bought bonds to make BAC's balance positive as a member bank. What part of that do you miss. Federal Reserve QE bought bonds put on deposit in the member bank BAC, for example.
One way street Bond profits money flowing into stocks. The Stock Market is 1/10th the size of the Bond Market. Plus the Federal Reserve put all those government bonds into their member banks to make them liquid. Those Government Bonds leverage @ 90 to1 inside the Federal Reserve Member Institutions. Bond money to stocks same as the Bolsheviks did a century ago. The Russian stock market under Bolshevik money printing soared. No new industry. No new jobs.
QE is a bank bailout, The central bank(or the Federal Reserve) buys bonds and deposits them in their member institutions to keep them liquid. The idea is a liquid bank will loan monies into the economies. QE is not now nor has it even been a social well being program. BAC is a classic example of QE lots of Bad Mortgage Debt causing a negative balance sheet. The Federal Reserve buys Government bonds and deposits them in their member bank BAC. Negative balance sheet(bankrupt bank) made liquid. Member banks get the government bonds from the ECB or the Federal Reserve to put on deposit in the Member Bank.
The Bolsheviks did it. The Soviets did it. Putin is doing it now with the Russian banks. Government bonds for LIQUIDITY of the Member Banks is the program. To think there is any social benefit from QE is pure Soviet style propaganda. Which is why Merkel oppose it. She was an East German Politician, QE is pure Eastern Bloc money printing to keep the Central Bank and it's member bank liquid.
QE is a Bank Bailout. Federal Reserve member bank bailout. What part of that did you miss? The Federal Reserves job is to buy, sell, and deposit in member banks. Where have you been?
Where is all the cash the Federal Reserve's QE programs injected into BAC?
The Fed bought loans off BAC's balance sheet?
The Fed also used BAC as a bond agent for QE what or who will replace all those revenues?
Now what is BAC going to do for revenue? QE's are over the Federal Reserve is done with BAC as an agent for purchases and the Federal Reserve is done buying BAC bad assets, so what now? Where is BAC revenues going to come from? No borrower or buy can match QE's fire power to boost BAC's bottom line?
Who is going to match the Federal Reserve's intervention in BAC's balance sheet? BAC looks destined to lower revenues and weak balance sheet? Earnings from where? Thin air.