Bank of america's fourth quarter can't go well (and won't)

BANK OF AMERICA 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 the collapse. The U.S. is paralyzed by RECESSIONand 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 and GOLDMAN SACHS 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 , which reported earnings ahead of Wednesday's open, 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 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. 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 . With both Citigroup and JPMorgan posting poor fourth-quarter trading results, it is hard to imagine how Bank of America could do much better. Even if it did, investors

would probably view the feat as an unsustainable one-time event. No one is looking for Bank of America to turn into a trading powerhouse — if such an animal can even be said to exist anymore

given how severely new regulations (or merely the threat of them) have clipped the wings of Wall Street traders. What analysts and investors are hoping to see from Bank of America is

evidence that it is putting mortgage litigation risk behind it. But how can the bank possibly provide such evidence? Don't expect positive news from negotiations between Bank of America

and government-sponsored enterprises Fannie Mae and Freddie Mac . Not when the Federal Housing Finance Agency, which oversees the mortgage giants, is under criticism from its inspector

general for failing to challenge a $1.35 billion settlement between Bank of America and Freddie Mac over mortgage repurchase clams. Some analysts are hoping for finalization of a long

ago-proposed $25 billion deal regarding mortgage servicing abuses between the banks and attorney generals from a majority of the 50 states in the U.S. Still, a big settlement is hard to

envision when attorneys general from several states, including New York, Massachusetts and Delaware, refuse to go along with a deal. "We look forward to doing whatever it takes to

obtain servicing reforms — whether through a negotiated deal with banks or through regulations issued by the federal Consumer Financial Protection Bureau. But we will not release claims that

we are currently investigating," wrote New York Attorney General Eric Schneiderman and his Delaware counterpart Beau Biden in an essay for Politico. In addition to mortgage servicing,

Schneiderman and Biden are investigating securitization, origination and "the Frankenstein's monster of a recording system called the Mortgage Electronic Registration

Systems," they wrote. JPMorgan, which has far fewer problems than Bank of America, saw its mortgage-related legal costs rise during the quarter, casting an ominous cloud over Bank of

America's coming report. Some analysts are hoping for resolution of Bank of America's proposed $8.5 billion settlement of mortgage litigation involving Bank of America, Goldman,

BlackRock Financial , Pimco and other large institutional money managers. But with Schneiderman, the FDIC and others arguing against the proposed settlement, it is hard to imagine the deal

will go through as proposed. If it proves more costly, analysts will have to revise upward their projections for Bank of America's mortgage losses. Most of those projections still use

that far-from-done $8.5 billion deal as a benchmark. Bank of America's share price may easily finish 2012 above the $6.48 level where it closed on Tuesday, assuming Europe doesn't

come apart in the meantime. Still, anyone who believes the bank's troubles are in the rear-view mirror is likely to be in for a nasty surprise. Additional News: FDIC Requires Big Banks

to Have Breakup Plan Additional Views: Option Bulls Won't Quit Bank of America ______________________________  _CNBC DATA PAGES:_ * Dow 30 Stocks—In Real Time * Oil, Gold, Natural Gas

Prices Now * Where's the US Dollar Today? ______________________________ _DISCLOSURES:_ TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding

positions in any individual stocks. Disclaimer