BAC is trading down 30 cents at $6.61, Citi is down 80 cents to$26.13.
As we saw in the post immediately below, BAC didn't agree with the downgrade.
Now Rochdale's Richard X. "I Am Not Full of Hot Air" Bove weighs in.
Moody's downgrade of three major banks on the premise the U.S. government will not stand behind them if they fail is "absurd," said Rochdale Securities analyst Dick Bove.
Financial stocks fell and bank credit default swaps widened after Moody's cut debt ratings on Bank of America [BAC 6.58 -0.32 (-4.64%) ], Wells Fargo [WFC 24.39 -0.28 (-1.13%) ] and Citigroup [C 26.413 -0.517 (-1.92%) ] on worries the government won't be there to bail them out. Moody's cut Bank of America long-term senior debt rating to Baa1 from A2 and its short-term debt rating to "Prime 2" from "Prime 1." It said the long term outlook on the bank's senior ratings remains negative.
"That is so absurd I can't believe anyone would even write it. This is the largest bank in the United States," said Bove of Bank of America. "It has business with one out of every five households in the country. The assumption is that the United States government would allow this bank to go under and pull all of those other people under with it!""In my view, I think Moody's has lost its mind," said Bove, known for his outspoken views....MORE