BAC Pays Its Dues; Freight Cars Don't Lie: Jim Cramer's Best Blogs

NEW YORK (TheStreet) -- Jim Cramer fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:

  • Bank of America's settlement, and
  • Using trains as an indicator.

Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.


Bank of America Pays Its Dues

Posted at 11:28 a.m. EST on Thursday, Aug. 21, 2014

How in the heck can a company write a $17 billion check to the government and still have its stock go higher?

That's a legitimate question, given that Bank of America's  (BAC)  stock is soaring now that it has paid the Department of Justice its bounty of which more than $9 billion of it is cash on the barrelhead -- enough to pretty much wipe out a quarter's worth of earnings along with any reserves.

The answer is simple: We are now able to estimate what Bank of America can earn. We are now able to put a number out there that can be reached. We are in the realm of "normalized earnings power."


What does that mean? As long as this litigation hung over the head of this bank, it was impossible to figure out what it could earn. There were so many lawsuits by so many government entities, so many charges, and so many billions in legal fees, all on top of the $60 billion that had been shelled out, that you were simply guessing about what the company could earn.

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