Ouch! BAC is facing $100bn paper loss as bonds have plunged due to rising yields.

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Bank of America is bearing the cost of decisions made three years ago to pump the majority of $670bn in pandemic-era deposit inflows into debt markets at a time when bonds traded at historically high prices and low yields.

The moves left BofA, the second-largest US bank by assets, with more than $100bn in paper losses at the end of the first quarter, according to data from the Federal Deposit Insurance Corporation. The sum far exceeds unrealised bond market losses reported by its largest peers.

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Again...This is what happens when you have incompetent leadership in place. The person or people who made this asinine decision to expose our company have a 100 billion dollar loss should be fired. I always thought the leadership was weak and shlitty.

Key word = paper

Definition: Not realized.

Snore.

That was a fear-mongering click bait headline to juice lame FT readership if there ever was one. BofA is a $3 TRILLION+ company. You think we can about a mosquito bite of $100bn? Stings a little, and yea we have to disclose, but so what?

Bet they will use this as an excuse to not pay us at year end though!

Held to maturity.

There are no losses here. It's like you put money in a CD and call the early withdrawal penalty a "paper loss".

Stop trying to push fear. The only way these turn into actual losses is if there is a cause for the bank to need liquid cash beyond reserves. So far, not the case. The only cause would be cash outflows due to higher deposit rates elsewhere, which is happening but in negligible amounts.

Fed expects rates to stay at current or marginally higher levels for something like three years, after which current values will recover. Fed also has the power to "create powers", such as -- here's a funny one -- magically allowing specific bond holders to call their bond. Just look what magic powers the FDIC put in place for SVB. Food for thought.

Let's hope for the best, not bet on the worst. And never bet against the fed.

I guess there will be a lot of restructuring in the company. I am figuring a lot of middle management will be cut. This is a huge problem for the company.

Any thoughts?

Thread regarding Bank of America layoffs

Ouch! BAC is facing $100bn paper loss as bonds have plunged due to rising yields.

6 replies (most recent on top)

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