Bearish Punk and Zeigel bank analyst (was bearish last year too) now bullish

http://www.bloomberg...6...&refer=home

U.S. Financial Crisis Is Over, Analyst Bove Says (Update2)

By Aaron Clark and Jeff Kearns

March 20 (Bloomberg) -- The U.S. financial crisis is over and the decline in bank stocks offers a ``once in a generation'' buying opportunity for investors, according to Richard Bove, the analyst who advised selling financial shares eight months ago before they tumbled.

``The last time an opportunity of this nature existed to buy bank stocks this cheap was in 1990,'' the Lutz, Florida-based analyst at Punk Ziegel & Co. wrote in a research note. ``There will be more negative developments but they will be meaningless.''

Bove said the Federal Reserve's rescue of Bear Stearns Cos., the fifth-biggest securities firm, and actions to increase banks' access to capital have been ``innovative, dramatic'' and ``brilliant.'' The analyst advised clients to sell shares of the biggest U.S. securities firms in July. The Amex Securities Broker/Dealer Index declined 19 percent in the next four months. His recommendation to buy Citigroup Inc. in November preceded a 29 percent plunge in shares of the biggest U.S. bank by assets.

A gauge of financial stocks in the Standard & Poor's 500 Index rose 3.8 percent today for the biggest gain among 10 industries. The group of banks, brokers and insurers has been the worst performer over the past year, falling 28 percent.

$195 Billion

The Fed cut its benchmark rate this week by 0.75 percentage point to 2.25, the lowest level in more than three years, after $195 billion in worldwide bank losses related to subprime mortgages. The central bank has cut the target rate for overnight lending six times and slashed the discount rate for direct loans to banks eight times since the middle of August, when the subprime collapse started to infect markets around the world.

``The actions being taken by the Federal Reserve are being mirrored by the Treasury, which now has finally grasped the scope of the problem,'' Bove wrote.

Citigroup Inc., the largest bank by assets, jumped 6.7 percent to $21.77 at 1:15 p.m. in New York Stock Exchange composite trading. Bank of America Corp., the second-biggest U.S. bank by assets, gained 3.7 percent to $39.99. Goldman Sachs Group Inc., the world's biggest securities firm by market value, rallied 3 percent to $171.49.

Bove recommended July 18 that investors sell shares of Goldman, Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns. He also downgraded Citigroup, Bank of America and JPMorgan Chase & Co.

He then upgraded Citigroup to ``buy'' on Nov. 27, according to Bloomberg data. He raised Goldman to ``market perform'' on Feb. 4, preceding a 14 percent loss in the shares.

Goldman this week reported first-quarter profit that beat analysts' estimates as asset writedowns and a drop in fixed- income revenue weren't as bad as expected. Its next-biggest rival, Morgan Stanley, reported earnings that fell less than analysts estimated as record equity sales and trading offset writedowns from the collapse of the subprime mortgage market.

To contact the reporters on this story: Aaron Clark in New York at aclark27@bloomberg.net. Jeff Kearns in New York at jkearns3@bloomberg.net.

Last Updated: March 20, 2008 13:26 EDT

basically the big banks got what they wanted (as always) from the Fed so now the natural price action can resume..no need for tricks and 'meltdowns' (that somehow just look that way via futures but never really materialize to the extent of say 5-10% 'real' meltdowns)

one thing the media got/will get right-gg

http://biz.yahoo.com.../wall_main.html

"Culture of Risk on Wall Street Not Seen Changing Amid Bear Stearns Downfall"

Edited by n83, 22 March 2008 - 09:26 PM.

He then upgraded Citigroup to ``buy'' on Nov. 27, according to Bloomberg data. He raised Goldman to ``market perform'' on Feb. 4, preceding a 14 percent loss in the shares.

He was bullish last year too.

He then upgraded Citigroup to ``buy'' on Nov. 27, according to Bloomberg data. He raised Goldman to ``market perform'' on Feb. 4, preceding a 14 percent loss in the shares.

He was bullish last year too.

Maybe I confused him with possibly another Punk and Zeigel analyst who was bearish on the financials last August (I remember him then saying there were rumors that BSC CEO had gone to China looking for dough for the company).

Unless it is that same analyst (bearish in August) who then turned bullish in November as you say.

Oh well..if so scratch all I wrote.

Edited by n83, 23 March 2008 - 05:27 AM.

LOL! He then upgraded Citigroup to ``buy'' on Nov. 27 nice call that...