Bank of America Disappoints Investors, National City Raises Money

Bank of America reported net income of $1.21 billion on revenues of $17 billion. This represents a 6.3% decline in revenues and a sharp 77% drop in net income, due to about $2 billion in asset write-downs and an increase in provisions for credit losses of about $4.5 billion. Given the market's reactions last week to similarly upbeat news from the banks and dealers that reported earnings, I would've expected the stock to be soaring. However, it appears as if investors are finally beginning to actually notice the minus signs in front of some of the bleak earnings numbers as Bank of America's stock is actually trading down before the opening bell.

In other banking news, National City has located some chumps willing to lend it $7 billion in order to stay in the banking business. According to Bloomberg, Corsair Capital is leading a group of investors that will pay $5 a share for the stock. Needless to say, current investors who certainly paid more for their shares, are none too pleased, as the stock is now getting pummeled before the open. Despite the 40% discount to the market price of NCC, I still have to wonder if this is a good investment for Corsair. NCC is based in Cleveland, where I'm fairly certain banks will pay you money to take foreclosed properties off of their hands. Furthermore, NCC made a few very expensive acquisitions in Florida, of all real estate hotbeds, near the height of the boom. What else lurks on NCC's balance sheet? You'd have to pay me $5 to find out.