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Bank Nationalization: Here’s Three Reasons Why You Should Be Worried
It’s a tough time to be a bank shareholder. You’re not just worrying about whether the ongoing recession or a further lurch downwards in housing prices is going to decimate the value of your bank’s loan portfolio. You’re also worrying about whether some government “stress test†or – worse still – nationalization is going to destroy most or all of your investment’s remaining value.
And finally, if you’re smart, you’re worrying about whether some cockamamie government loan scheme is going to artificially force down the nice juicy interest margins your bank is earning on the new loans it makes.
Clearly, when it…
27Feb2009 | Money Morning | 0 comments | ContinuedNew Banking Bailout Plan: Just More of the Same
By relying on asset-backed securities, large amounts of leverage and unregulated hedge funds as its key elements, the U.S. Treasury Department’s overhaul of the banking-system bailout plan is essentially relying on some of the same ingredients that caused the financial crisis in the first place.
This time around, someone should take the punch bowl away before the party even gets started. Otherwise, as Yogi Berra once said, it will be “Déjàvu all over again.”
The only difference this time around is that the U.S. Treasury Department is calling the plays.
Backdrop on a Bailout
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The Next Victim in the Banking Fiasco
A New Short Idea in the Banking Sector
“You know, you saw subprime go first, and then, on a slight lag, you saw home equity, and now in the lag, you’re seeing prime go. And it’s exactly the same loss factors. But remember, the components of where we are in the states…[are] very different. And we started doing more jumbos in ‘07, so a lot of that is — part of that is ‘07 vintage, which I think I told you at the time we were going to do and grow our balance sheet and gain share. And we were wrong.…
28Aug2008 | The Penny Sleuth | Comments Off | ContinuedThe Real Secret to Fractional Banking
Aug. 25 (Bloomberg) — Treasuries rose the most in almost two weeks on speculation credit-market turmoil may be widening.
The gains pushed yields on U.S. 10-year notes to the lowest since May 13 as financial stocks fell amid speculation American International Group Inc. will post a loss and Korea Development Bank may be reconsidering a possible bid for Lehman Brothers Holdings Inc. Interest-rate derivatives imply banks are becoming more hesitant to lend.
Oh boy…here we go. I’m struggling to even figure out where to start. First of all, any idiot who buys a U.S. Treasury Bond should be taken out…
26Aug2008 | Oxbury Research | Comments Off | ContinuedBuying Bank Stocks: Good Bet or Big Gamble?
If you have followed the market over the past year, you know what’s been happening if you’ve been thinking about buying bank stocks.
A good proxy for the group is KBW Bank ETF (AMEX: KBE), an exchange-traded fund that holds all of the nation’s major banks. The fund has lost nearly half of its value over the past 13 months.
The index of smaller, regional banks – Regional Bank HOLDRS (AMEX: RKH) – has fallen even more.
And some banks – even the large ones – are going down for the count. Two weeks ago, for instance, we saw the federal takeover of…
31Jul2008 | Investment U | Comments Off | Continued
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