Bank of America Is Totally Above-Board

by Karl Denninger

…. which is why they did this:

Bank of America Corp., the biggest U.S. lender by assets, almost doubled a goodwill impairment for its credit-card unit to $20.3 billion to reflect increased defaults and an almost two-year-old change in rules.

Re-state 2009 and 2010 numbers now, rather than telling the truth then.

The lender had previously tested goodwill for entire business segments rather than subsidiaries, Stickler said. The company identified the charge to its credit-card unit last year after “we changed our processes and looked more closely at legal entities underlying the businesses,” he said.

And they had no idea that it stunk this badly, right?

Well, pick one, because there’s little room for anything beyond one of these two explanations:

  • They lied.
  • They don’t know what the hell they have and what it’s worth.

Either way do you want to do business with – or invest in – this company?

Incidentally, that $10 billion increase is about 7% of the firm’s market cap, but they’re only down 4% on the day.  Looks like people still believe in the candy-crapping Unicorn.

You’ll learn eventually…… the hard way.

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