Wow.

I thought it was stunning when I read a short Bloomberg story just yesterday about a Bank of America chief investment strategist putting a “sell” on the entire bank industry, essentially implying that it is insolvent and that the Obama/Geithner plan is just papering that over.

I guess it was stunning for BofA, too. Today, it announced the analyst, Richard Bernstein is leaving the firm.

Here’s what Bernstein wrote yesterday:

Removing devalued loans and securities from banks’ balance sheets is a short-term solution that will delay the problem’s ultimate solution, which is bank takeovers, Bernstein said. The government won’t be able to inflate the prices banks receive for selling bad assets indefinitely, he added.

“The history of bubbles shows quite well that financial sector consolidation is inevitable,” Bernstein, Bank of America’s chief investment strategist, wrote in a research note. “Financial stocks will be attractive when the government tries to speed up that inevitable process. However, to the contrary, the government continues to attempt to stymie that inevitable consolidation”…

Bernstein compared the U.S. plan to Japan’s response in the 1990s, when the government, faced with public opposition to its bailouts of banks, waited before trying to fix its financial system. That resulted in the “Lost Decade,” in which economic growth averaged less than 1 percent a year and the unemployment rate more than doubled.

BofA says Bernstein, who came over from Merrill Lynch is planning to start his own money-management firm. I’m sure he is.

Barry Ritholtz puts it this way:

Bernstein (also a star) very publicly trashed the banks yesterday, and while you can do that when you work for Merrill, I would imagine its frowned upon when the name over the door is Bank of America. “Exploring opportunities” is corporate speak for shown the door (I am curious if can confirm if RB was pushed).

I am, too. The only other explanation I can think is that Bernstein wanted to get a flash of publicity to help his new venture out and correctly thought stunning candor would do the trick.

Either way, it looks very bad for the bank.

(h/t Atrios)

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.