White House: Mortgage Bailout Denied

The White House denied rumors it plans a massive mortgage-refinancing effort, Bloomberg reports. However, Bank of America (NYSE:BAC) rose an astounding 8.6% today, outperforming its suffering brethren in Europe, partly due to rumors that the Obama administration has a big mortgage-refinancing plan in the works.

It’s not entirely clear how much it would help Bank of America, but the stock ripped higher anyway, and eventually pulled the whole market up with it, Joe Weisenthal pointed out. The gain today was a leading indicator that the rest of the market would rise, too, after all as goes with Bank of America, so goes the rest of the market.

But according to Todd Hagerman, an analyst in New York with Sterne Agee Group Inc., “there are a lot of existing roadblocks to the refinance boom occurring in the near future.” At Zero Hedge, one entire JMP Group (NYSE:JMP) analyst note states that even if there were a massive refinancing it would not help Bank of America.

“But, again, this rumor may have helped rescue it from an uglier day. At one point the Dow was down more than 100 points, and the euro was getting clobbered all day. It was recently down 1.2% at $1.2779 against the dollar,” according to The Wall Street Journal.

To contact the reporter on this story: Tanya Harding at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com