Rochdale Securities analyst Dick Bove says Moody's is just plain crazy to downgrade Bank of America.

"That is so absurd I can't believe anyone would even write it," Bove told CNBC. “This is the largest bank in the United States. It has business with one out of every five households in the country.”

“The assumption is that the United States government would allow this bank to go under and pull all of those other people under with it!"

Dick Bove (Rochdale file photo)

"In my view, I think Moody's has lost its mind," says Bove, adding that the Moody’s downgrade created an excellent opportunity to buy B of A stock.

If Bank of America went under, basically it has to call all the loans it has — $940 billion in loans outstanding, Bove notes. In addition, it has $1.38 trillion in deposits.

"You think the FDIC can cover that?...The idea that the U.S. government would allow it to fail is beyond the realm of possibilities."

Moody’s, which also downgraded Citigroup and Wells Fargo, cut Bank of America long-term senior debt rating to Baa1 from A2 and its short-term debt rating to "Prime 2" from "Prime 1." The ratings agency also said the long-term outlook on the BofA’s senior ratings remains negative.

Reuters reports that Moody’s based its downgrade decision on the belief that the U.S. government is "more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled.”