Analysts like Meredith Whitney and Mike Mayo have largely stuck to their original story. But some former bank bears have in fact changed their tune.
Example: Dick Bove, the former Landenburg Thallman analyst, who’s since started his own shop, says Bank of America (BAC) is going back to its all-time highs. And this was a guy who was early to warn about the banking crisis.
Now Bove was not nearly as negative as history remembers him. He didn’t think the banking crisis would be anywhere near as bad as the late 80s or early 90s. But he did take a lot of heat for drawing attention to some particularly weak banks in a report that ultimately forced him to quite at Landenburg over lawsuits.
Bove thinks Mayo’s totally off, and most importantly, that the economy has bottomed, which would suggest that asset values are sustainable and may even rise from here.
By thew way: If Bank of America is headed back to its all-time highs, you’re looking at a gain over over 800% from here.
Update: Here’s some more of Bove’s reasoning. He believes Ken Lewis that the bank will do profit of $30 billion this year and he says losses of peaked. Ultimately, it comes down to the economy and so if the economy turns around, he expects Bank of America to benefit more than others.
Other than his belief that losses have peaked, it’s still not clear how he addresses claims that assets are being carried on bank books at unreasonably inflated valuations.