Up is down. War is peace. Stress test failure is only good news.
During a week in which there were several reports about Bank of America (BAC) needing to expand its capital cushion, by as much as $34 billion, shares in the bank have been on a tear. Last week they closed at $8.97. Today they’re 36% higher at $12.22.
It’s not a bad week for Ken Lewis, though the real winner is the government, which just have done enough spinning and leaking to find a way to release bad stress test results without hurting bank stocks. That was a tough tight rope to walk and they pulled it off.
Meanwhile, JPMorgan (JPM) — which won’t need any new capital, it has been confirmed — is up just over 10% on the week. Though to be fair, the company hasn’t been hammered nearly as hard as BofA has.