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Heads Up on Banks


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#21 TMN

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Posted 21 January 2009 - 10:54 AM

and have this one too ( no politics just my OPINION): central bankers to guantanamooooooo!!

#22 OEXCHAOS

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Posted 21 January 2009 - 10:54 AM

My bank is writing loans hand over fist. They didn't get hurt before. I can't see how you can be making money and be bankrupt but I'm silly that way. :) Mark

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#23 nicolasillo

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Posted 21 January 2009 - 10:55 AM

Mark what s your bank? I m transferring all my money there :P

#24 OEXCHAOS

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Posted 21 January 2009 - 11:07 AM

Mark what s your bank? I m transferring all my money there :P


TFSL

That's sort of a cheat, but I think it's indicative of many, many smaller banks who kept doing business the old fashioned way.

Mark

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#25 Cirrus

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Posted 21 January 2009 - 11:09 AM

I know very few here trade on fundamentals, but those who do should be advised that EVERY bank is going to be taking every single charge that they can right now.

Why?

Well, let's leave any government aid stuff aside for now. Look at things from a manager's standpoint.

You've got all the cover in the world to take losses now. Nobody will criticize you. If the stock goes down, well, that's a good time to re-negotiate your stock options portion of compensation. Then, next year, you're going to have a very easy time showing good year-over-year comparisons.

Now, I'm not the only guy to have figured this out, so expect many of these stocks to report "bad" earnings, and yet rally. Just know what it means and don't take the "bad news" at face value.

Mark



Mark,

I do agree with you about charges and banks. The healthy banks will take charges for sure...heck all banks will to set up future earnings. Reading into your statement makes me think your psyche is that a major buying opportunity is at hand in the sector....another possibility.

The problem right now is the current global G-8 financial system. We are talking about the insolvency of the UK, here. Look at our banks...BAC and C. This isn't about earnings, it's about survival. The markets are telling us this. The pound sterling is probably ground zero right now and needs to be watched closely. Any further rapid slide would flash serious warning signs.

It's time to throw away optimism and adopt realism. We are talking about institutions that are critical to the current global monetary system falling like dominos. It may sound like I'm gloom and doom but I'm not...just realistic here. I'll be the first to buy JPM, GS, BMO, TD, RY, etc at least for a trade when it looks like the crisis ends.

I took lots of ETF (bond/junk bond related) profits off the table and I'm waiting now. I'm watching high yielding assets (ETFs, certain equity groups) for a major buying op.

#26 dasein

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Posted 21 January 2009 - 11:33 AM

pretty much all listed US banks are insolvent, since pretty much all of them hold mortgages as their primary assets. Merchant banks are probably better of, but will not stay that way as the recession deepens in the next year+. Since it would take a long time to substantiate this opinion by demonstrating the state of all assets hed by all banks in question, and many of those assets are not available to scrutiny, it is beyond my purview and any opinion on the solvency or insolvency of a bank ot yet declared insolvent is a matter of speculation. Any bank can show earnings despite being insolvent, just like any company can - an insolvent company can continue to operate as long as its credit is not called. if you are looking for a safe bank, I suggest you look into credit unions - a credit union that has a stable membership whose jobs will not be threatened and one that has the backing of a government entity rather than a company - i.e. GMs credit union is not the way to go, but a US government credit union would be. CUs are not insured by the FDIC, there is a separate CU insurance scheme for them, and there ar far fewer CUs than banks.. klh
best,
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#27 humble1

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Posted 21 January 2009 - 12:09 PM

wow! there are some (a lot!) of galaxy class mega/permabears here who get angry when someone doesn't agree with the gloom-and-doom end of the world scenario!

#28 pdx5

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Posted 21 January 2009 - 12:23 PM

I know very few here trade on fundamentals, but those who do should be advised that EVERY bank is going to be taking every single charge that they can right now.

Why?

Well, let's leave any government aid stuff aside for now. Look at things from a manager's standpoint.

You've got all the cover in the world to take losses now. Nobody will criticize you. If the stock goes down, well, that's a good time to re-negotiate your stock options portion of compensation. Then, next year, you're going to have a very easy time showing good year-over-year comparisons.

Now, I'm not the only guy to have figured this out, so expect many of these stocks to report "bad" earnings, and yet rally. Just know what it means and don't take the "bad news" at face value.

Mark



You are wrong!

Well, actually your hypothesis is right on mark, just wrong about it being limited
to banks. Every CEO in every outfit has the best cover right now to write off all
loss items. So I expect a barrage of slashes in earnings in all troubled areas, just
not banks. This COULD pave the way for sudden improvement in subsequent quarters.

Edited by pdx5, 21 January 2009 - 12:24 PM.

"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule

#29 humble1

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Posted 21 January 2009 - 12:32 PM

exactly!: think y/o/y. (and to trim staff and cut benefits; corps will come out lean leveraged for profit.)

Edited by humble1, 21 January 2009 - 12:33 PM.


#30 OEXCHAOS

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Posted 21 January 2009 - 12:36 PM

It's always hard to figure the time lags. I think that it'll be March before we see strong signs of the stimulus from refi's. Figure that any done in December are just about to have their first effect at the end of this month. So January's will be hitting March. They'll likely start discounting evermore additions of liquidity so long as the window is open around then. It's hard to figure how that'll effect the earnings comparisons and when. Mark

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