Dick Bove of Rochdale Securities spoke out this morning on CNBC saying that the “AAA” rating should not even apply to the U.S. when you include the $14.4 trillion that will grow to about $20 trillion in the next 4 or 5 years.  He has many concerns about the system.  What he did do was come to the rescue of Bank of America Corporation (NYSE: BAC), although he did stop short of calling it a “buy” rating.

The thesis behind defending the merits of Bank of America was based on several key issues.  With BofA down 20%, the $2.1 trillion in guaranteed paper in the banking industry and that paper loses value on the U.S. downgrade and that cuts capital availability.  On BofA specifically, he thinks it was a “little bit obscene” when it has one of the strongest balance sheets in America.  He even noted how bankruptcy (Chapter 11 that is) rumor emails were coming to him yesterday with no real merit.

Bove went on to note that BofA has $140 billion in cash and another $300 billion in securities.  If everyone who had a short-term loan repayment in 25 minutes, BofA has the cash to cover it and still has cash left over.  He called its $126 billion in tangible equity and $206 billion in equity.  Bove also said it has more trading assets than trading debt and more derivative assets than derivative debt.

Bove finally noted, “This company is so far away from being in trouble or needing additional capital that it’s ridiculous.”

This all sounds like “Buy, Buy, Buy!” but Bove did note that he thinks stocks are still going lower, but he said “If I were to be buying something, it would be Bank of America.”

For more on the banking system woes and worries, which Bove has many of, that is here on CNBC.

JON C. OGG

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