Bank of America CEO Brian Moynihan has his opinion about the recovery of the housing market.
The bank’s senior U.S economist, Michelle Meyer, has hers.
And they’re not the same.
While Moynihan and the bank’s management, believe “home prices may begin a ‘gradual improvement over the second half,'” according to Bloomberg, Meyer doesn’t see the bottom until sometime next year.
(As a sidenote, other banks and their analysts think the “drop could exceed 10%).
So far, Moynihan’s view has been wrong.
In fact, because of his misplaced bullishness, “underestimating the slump in U.S. real estate led to $3 billion of expenses in the past two quarters, and Bank of America said it may suffer $1.5 billion in losses for every four percentage points that declines exceed forecasts,” Bloomberg reported.
Meyer has said that, “there’s a long and painful path before the housing market looks normal.”
Neil Cotty’s outlook — the one adhered to by Moynihan and Bofa management — is, according to the bank, “directionally” consistent with Michelle’s, though we can’t really see how, when she says things may start to pick up in 2012, and Cotty says the sun will begin shining again in the second half of 2011.
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