I mentioned that you need to watch the preferred shares of banks to see what the Obama Administration is crafting as their plan to nationalize the Big 4 insolvent US Banks (Bank of America, JPMorgan, Wells Fargo and Citigroup).
I did so because the preferred shares will likely be worthless if the government nationalizes these banks.
In today’s trading, 24 different Bank of America’s (BAC) preferred stocks traded at new 52-week lows. The common stock of Bank of America also hit a new 52-week low today.
Big Money is passing their verdict on the fate of BAC by selling.
For Your Protection
If you have accounts at Bank of America, La Salle, Countrywide or Merrill Lynch, then you had better make sure that you do not hold any balances that are not insured by the FDIC or you may lose this money over the weekend.
I am not short BAC and I do not hold any shares in the SKF (200% short the Financial Index). So I have no vested interest in causing a run on BAC. I mention this, because I do not want the SEC to come after me for rumor-mongering.
Huntington Bancshares (HBAN) closed today at $1.44 per share. Goodnight Huntington.
I will alert you if I start to see any new focused selling in other banks.
Bond Funds
I would be very wary of Bond Mutual Funds right now too, because these tend to load up on bank debt and if BAC gets nationalized, these funds may take a hit in their portfolios too.
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