Why were we waiting for Ben Bernanke to rescue the stock market? Meredith Whitney’s been here all along, waiting to save us.
And save us she did, by declaring loudly that downtrodden Bank of America is not in a “mad dash to raise capital immediately.” What a ringing endorsement! She joins a host of other analysts rallying to BofA’s defense today, including Rich Bernstein on CNBC.
But Ms. Whitney still has a reputation as the woman who predicted the downfall of the banks during the crisis, so if she says BofA is not on its deathbed, then BofA must not be on its deathbed, goes the market’s thinking.
BofA’s stock is up nearly 9%, to $6.83, and the rest of the market is rallying, too. The Dow is up 90 points, and the S&P 500 is up 0.8%. Financials are leading the S&P 500 rally, up 2.3% on the day.
Ms. Whitney’s bad/early call on munis has been forgotten for the moment. After all, banks are more her forte, anyway. Of course, she also said BofA is “going to raise capital steadily over time.” That could still be dilutive to shareholders, assuming they raise it by issuing equity — though Ms. Whitney said she thought BofA “probably” wouldn’t need to do that.
(Updated the last paragraph to include Ms. Whitney’s comments that she thinks BofA probably won’t need to issue equity.)
Update 2: The Whitney Bounce may not make it to lunchtime: The Dow is now up just 13 points, and the S&P is barely in the green. S&P financials are still up 1.4%, however, and BofA is now up 9%.0
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