US Bancorp CEO Shows Dimon How to Make Money: Riskless ReturnBloombergInvestment banks including JPMorgan Chase & Co. (JPM), which last month announced a $2 billion trading loss, Citigroup Inc. and Bank of America Corp. (BAC) ranked near the bottom…
Assuming the Dow Jones Industrial Average represents the biggest, most influential companies in America, Apple Inc. (Nasdaq: AAPL) easily qualifies.
With its massive market cap, trend-setting products, and global brand recognition, it is easy to argue Apple belongs as much or more than any of the current tech companies in the index.
So what gives?…
In a nutshell, Apple stock is too rich for the Dow Jones Industrial Average.
Because the Dow Jones is price-weighted, Apple’s current $565 share price would simply overwhelm the index.
“It wouldn’t be the Dow Jones Industrial Average,” Nicholas Colas, chief market strategist at ConvergEx Group told the Associated Press. “It would be the Apple Plus Some Other Stuff Index.”
In this case, a price move of just 5% in Apple stock could push the DJIA up – or down – about 200 points.
Looking at it another way, had Apple been added to the Dow Jones in 2009 instead of Cisco Systems Inc. (Nasdaq: CSCO), the Dow would now be over 15,000.
That’s well above the Oct. 2007 record of 14,164 and 2,500 points higher than where it stands today.
With that kind of heft, it’s no wonder the Dow has shunned Apple.
How the Dow Jones Industrial Average Works
But it’s not just Apple. Other Dow candidates trade high in the triple digits as well.
Investors are not taking lightly the lackluster performance of the Facebook stock price (Nasdaq: FB).
On Tuesday the finger pointing blame game began, followed today (Wednesday) by lawsuits.
Financials rise; regulators to review JP MorganMarketWatchAmong the Dow Jones Industrial Average's (DJI:DJIA) financial shares, Bank of America Corp (NYSE:BAC) and JP Morgan Chase & Co. (NYSE:JPM) each rose about 1.5%. It's a good time to o…
If you have a mortgage with Bank of America (NYSE: BAC) and want to refinance, don’t bother.
You are not worth the bank’s time. Or at least I wasn’t.
That’s what I learned first-hand last week when I called Bank of America to refinance a home mortgage I’ve had with them for years.
My jaw practically hit the floor when Alejandro from BofA’s mortgage department told me this over the phone.
“Because of excessively high demand,” Alejandro said, “we can’t accept your refinancing application. But we can take a reservation and have an agent call you in 90 to 120 days.”
Huh?…You can’t be serious.
I really have to wait three or four months to even apply for a lower interest rate when I’ve been an existing customer for years?
Yeah, I bet, I thought to myself…
They’ll call me when interest rates are much higher or when BofA works its way through its part of the $25 billion robo-signing settlement reached over its abuses in the foreclosure process.
Of course, all of this is after BofA received $45 billion in taxpayer bailout funding.
And after they reportedly shifted the risks associated with $75 trillion in derivatives from its investment banking and trading units to BofA’s depository arm, a unit flush with FDIC-insured deposits.
But that is another story for another day.
How Bank of America Treats its Customers
Suspecting something wasn’t quite right, I made a second call to BofA to inquire about a new loan.
Not ten minutes later I was put through immediately to an underwriter who was all too happy to help a new, unknown prospect – a.k.a. me – take on more debt. Imagine that.
At the request of counterparties, BAC is moving derivatives to its FDIC insured subs. Naked capitalism claims that the 2005 bankruptcy laws give derivatives counterparties first claim against assets. How this transfer is not a crime, I cannot imagine….
Fitch puts three U.S. banks on review for downgrade
On Thursday October 13, 2011, 4:42 pm
(Reuters) – Fitch Ratings placed Bank of America Corp (NYSE:BAC – News), Morgan Stanley (NYSE:MS – News) and Goldman Sachs Group Inc (NYSE:GS – News) on review …
Did big banks leave TARP too soon?
By Jennifer Liberto
@CNNMoney September 30, 2011: 5:35 AM ET
Former FDIC Chair Sheila Bair pushed for the big banks to be held to tougher capital standards before they exited TARP.
WASHINGTON (CNNMoney) — Regulato…
Well, according to this link:
…Bank of America is solidly back in the six-dollar range, and headed lower.
Poor “Uncle Warrant” must be kicking himself for piling into this pig.
Anyway, are we coming closer to…
Report: Bank of America job cuts may hit 40,000
Boston Business Journal by Tim McLaughlin
Date: Friday, September 9, 2011, 7:00am EDT
BAC reeling from concerns over the size of its liability from troubled mortgages, has discussed cutting up to 40,00…