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Old 09-12-2008, 12:18 PM   #1
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Banks

Looks like Lehmans, Washington Mutual and AIG are going to have to restructure or go under. Next week will be the litmus test.

Lehmans will probably get taken out over the weekend.

Expect Washington Mutual to seek a buyer or merger quick before it gets a run on its available funds.

The bank to watch is City Bank. If it's stock price doesn't move significantly through all this volatility it may be a signal for the bottom for City Bank.

Anyone considering buying US banks yet?
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Old 09-12-2008, 12:55 PM   #2
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Old 09-12-2008, 01:05 PM   #3
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I've already bought in - KBE - prior to having it run up about 30%. Unfortunately I didn't deploy all the capital I wanted. KBE is an index fund of approx 20 something large US banks. I'm sure a few of the holdings will be dogs, but I expect the large majority to be profitable entities worth a good bit more in a few years than they are trading at today. I have no opinion as to specific banks though. If you are looking for the right time to get in, it may be too late. I'm not jumping in at today's prices.
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Old 09-12-2008, 01:21 PM   #4
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Already have, ASCB, BAC and USB.
However there are lots of other stocks 'on sale' that don't have direct exposure to the credit crisis, so I buy a lot of other stuff too.
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Old 09-12-2008, 03:32 PM   #5
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My only individual stock is BanK of America. It has sure been volatile but it still pays out its dividend every quarter.

There are lots of banks and insurance companies that are talked about as "being in trouble." The problem is knowing whether they really are or if "shorts" are out to turn a quick buck. The other problem is that once people hear about a "problem" there a a rush to remove money from their care and a reluctance to do business with them. Then they really are in trouble.
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Old 09-12-2008, 10:43 PM   #6
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I thought I saw a sell signal when WaMu offered free printed checks for life. j/k
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Old 09-13-2008, 09:04 AM   #7
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WaMu has offered that many times over the years. I have a 20 year old account with free printed checks for life. If that's a sell signal it is a very slow one.
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Old 09-13-2008, 09:53 AM   #8
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WaMu has offered that many times over the years. I have a 20 year old account with free printed checks for life. If that's a sell signal it is a very slow one.
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(I'm still kidding): Maybe they thought everyone would use internet banking much sooner and wouldn't need to mail any free checks after a while. Their ad campaign just hit my radar screen a few months ago. I'll stick to AA and a long time frame rather than buy/sell signals.
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Old 09-13-2008, 01:31 PM   #9
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Maybe. But some sell signals do work. I had my son's daycare teacher give me a long lecture once about the merits of investing in tech stocks and IPOs as they way for everyone to make money. Wish that I had heeded that sell signal.
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Old 09-13-2008, 03:56 PM   #10
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Maybe. But some sell signals do work. I had my son's daycare teacher give me a long lecture once about the merits of investing in tech stocks and IPOs as they way for everyone to make money. Wish that I had heeded that sell signal.
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Me too, the giveaway would be, what?: "the way for everyone to make money." The lady who cuts my hair was gung ho on day trading a while ago, then she gave it up; I'm due for another hair cut/financial consult. If she's not buying, I definitely will buy; I think it's a good enough time anyway.
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Old 09-15-2008, 09:53 AM   #11
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Well, I was off a bit on my predictions. Guess the Fed has to let one bank fail rather than broker a deal. I checked City Bank, down over 6% today. Not a good time to be in banks. I think there is still more fallout to come WAMU will be next and AIG is looking shaky and will probably have to sell some major assets to survive.


From the reactions on the board I am surprised. I thought it obvious that more banks would fail. In my opinion, the Fed Deposit Corp may also have to be bailed out by the Fed before this is all over as there are over 150 banks on the watch list and the Corp doesn’t have enough funds to stop a run without the backing of the Fed.
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