(Updates to note rise in Bank of America share price on Wednesday.)
NEW YORK ( TheStreet) -- Bank of America (BAC) shares have been rallying this year after a dismal 2011. That suggests there's little chance for a positive surprise from the bumbling banking giant when it reports fourth-quarter earnings ahead of Thursday's open.
How else to describe Bank of America, which has stumbled so often since the 2008 crisis it is difficult to imagine the bank doing anything right? Even if it did, investors would probably just chalk it up to dumb luck, and sell the stock anyway.
The current banking environment is not for amateurs. Political and regulatory minefields lurk around every corner. Europe is on the verge of collapse. The U.S. is paralyzed by recession and the short-term thinking of its political and business leaders, who only want to dress up ugly numbers to win the next election or cash in their stock options at the earliest opportunity.Nowhere are these ills more evident than in the performance of giant multinational financial institutions. Even supposedly well-run companies like JPMorgan Chase (JPM) and Goldman Sachs (GS) are having a tough time of late. JPMorgan posted horrible trading results in the fourth quarter as well as a decline in mortgage revenues when it reported its results on Friday. Goldman's quarter was far better than analysts expected, but mostly because it slashed compensation. Goldman has seen some high-level defections as it struggles to find its footing amid widespread public criticism and the threat of harsh new rules aimed at type of trading that for years formed the heart of its profit machine. Wells Fargo (WFC) has bucked the trend, turning in solid results again in the fourth quarter and showing strength in mortgage origination and even capital markets. But Bank of America is no Wells Fargo. (And remember that billionaire investor Warren Buffett owns Bank of America's preferred shares, not the common stock.) It has been too busy looking for businesses to sell to meet tough new capital rules. Bank of America is in no position to scoop up talented investment bankers on the cheap, as Wells did in hiring several executives from Chicago-based investment firm Citadel last year, or to buy a distressed European lending business as Wells did recently in acquiring from Burdale Capital Finance from the Bank of Ireland (IRE).
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV