Stress Test Leaks: BoA In Trouble, Whither Citi?

Well, the rumors are out there, and the latest is that the test will report that Bank of America needs $34 billion in additional capital.

Bank of America 3 Month Share Price

(By way of context, BoA is trading at about $11½ with a market cap of $74 billion, which means that it needs to sell new shares roughly equivalent to half of its outstanding ones in order to properly capitalized by the standards of Timothy "Eddie Haskell" Geithner's Treasury Department.

Note, of course that this is based on their so called "worst case" stress test, which is already more optimistic than what we have seen in the past 3-4 months.

Citi 3 Month Share Price

That being said, if the numbers are bad for BoA, they must be truly horrific for Citi, which is generally considered to be in the worst shape of the big 19 banks, which has been trading at about $3½, with a market cap of 19.2 billion, and if they need to raise anything near to 30 billion, they will be back in penny stock land for good.

I would also note that if these numbers are accurate, and they might not be, I think that the indications are that the stress test was conceived to make sure that everyone "got a gold star," which would make reality even more alarming.

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