Recent complaints by Citi’s (C) Pandit and Bank of America’s (BAC) Lewis can only leave investors head shaking..
Today Vikrim Pandit said that “rumor mongering” was at the heart of the company’s stock slide and yesterday called in Gov’t officials to re-instate the short sale ban. It should be noted that this was tried earlier this fall, and , well, stocks fell anyway. Not sure what Pandit hopes to accomplish here. He also said the bank has plenty of liquidity and will not break itself up.
I can believe #1 but still do not understand #2 at this point. There has to be assets that can be sold to raise equity. They have $2 trillion of them. Something must be able to let go…
Now, watch Ken Lewis in Chicago Thusday..
Lewis blamed “lax regulation” for much of the problems today. Was he forced to loan money? Was he forced to pay billions for Countrywide (CFC) when he could have just stood still and watched it go into bankruptcy? Was he forced to overpay for Merrill Lynch? He bought it and paid what he did for “before someone else bought it”. Now, if we listen to what Lewis said above, then his reasoning behind buying it then was flawed. If that model can no longer survive, then had he waited, he could have bought it far cheaper and no, Ken, no one else wanted it.
Ever notice how little we hear from Kovacevich at Wells Fargo (WFC) and Dimon at JP Morgan (JPM)? It seem the only time we hear from them are when Dimon is bailing out another institution or Kovacevich is complaining about being force fed TARP funds he does not want.
Whining about short sellers has never entered into the conversation.
Lewis and Pandit are seeing their company’s in the positions they are in due to poor decisions. Lewis has no one to blame but himself with very poor acquisitions recently. Both the businesses he bought and the prices he paid should have never been attempted. Pandit can blame the mess he inherited on former CEO Chuck Prince but cannot excuse the near year of inaction he has since held rein over.
Don’t invest in companies who blame other for the stock and performance slide…
Disclosure (“none” means no position):Long WFC, none
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