Bank of America is in serious trouble after reporting horrible 2nd Quarter loses

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You can almost hear the bulls pleading with investors not to panic about the worrisome second-quarter results from the nation’s largest bank by assets.

“One would think BAC’s results were disastrous. Were they really that bad?’’ writes Stifel Nicholas analyst Christopher M. Mutascio in a note this morning. “Sometimes it is good to have the benefit of a weekend to think things through in a bit more detail and with less emotion that a sea of red on your screen can often influence.”

It isn’t working. After dropping 9% on Friday, erasing roughly $10 billion in market value, BofA shares are down another 4% today.

Investors are running scared after Bank of America declared that it is going to cost an unexpectedly large sum to adhere to the recently passed financial-regulation bill. All told, the legislation could cost the bank as much as $13 billion (roughly what it has lost in market value in the past two trading sessions).

CEO Brian Moynihan dropped the cost estimates in a conference call on Friday in what Deal Journal pointed out was an uncharacteristically frank admission for a bank with a reputation of late for burying bad news. Moynihan declined to say how the bank would try to offset the expected costs, leaving analysts, who still are overwhelmingly bullish on BofA, to fill in the blanks. (Out of the 27 analysts that cover BofA, 22 have “buy” ratings; none has a “sell” on the shares). The Curious Capitalist was also incredulous about why investors reacted so negatively to BofA’s profitable quarter.

Full Story: BofA’s 2nd Quarter: The Bloodshed Continues – Deal Journal – WSJ.