Bank Stocks

[ChrisC]

Quote:

Originally Posted by Gumby Actually, banks cannot be debtors in bankruptcy (11 USC Sec. 109(b)(2) for those who want to see for themselves). I believe that it would be a receivership proceeding under the auspices of the Office of the Comptroller of Currency. I don't know the rules for that, but I assume depositors have the highest priority.

Actually, you have it partially correct. Bank receivership proceedings are conducted under the auspices of the FDIC for any federally insured bank or thrift institution (e.g, savings and loans associations, mutual savings banks, etc). The OCC regulates national banks, like Citibank, N.A., and by statute, must appoint the FDIC as receiver, whenever the OCC decides to "close" a national bank for liquidity/insolvency or safety and soundness reasons.

Insured depositors, of course, get taken out by FDIC insurance. But any uninsured depositor (the amount in excess of your insured coverage) has the highest priority in the claims process, after payment of the FDIC's administrative expenses as receiver.

"Too big too fail" policy has been around since the Continental Bank failure in 1984; by "fail," I think people mean that the bank is placed in liquidation mode, where the assets and liabilities of the bank would be handled under the orderly liquidation/receivership process. The last bank that was too big too fail was Bank of New England in 1991, which drew comparisons, with the failure of Freedom National Bank, a small bank founded by Jackie Robinson, among others, in which the uninsured depositors, including several charitable orgainzations took a hit. Congress mandated that the regulators use the "too big too fail" policy under very limited circumstances, but mega-banks would probably qualify.

[al_bundy]

bsc has 115 some odd shares outstanding and 78 million traded so far

i bet by the end of the day it will be around 115 million and average volume is like 10 million. it's like every shareholder decided to sell the stock today.

for days like this,who needs coffee?

[Running_Man]

I eagerly await investor votes on Bernake next week

A very interesting week will be on tap for the bank stocks next week. Never in decades has their been a time where the entire world will be wondering about investor reaction to the Federal Reserve's move as they will be in the coming week.

• If the Fed reduces rates by 1 percent down to 2 percent will a massive rally follow?
• I would never have believed the Fed would totally abandon the US dollar what effect will that rate cut have on foreign investor confidence in the US?
• What is the impact of the Bear Stearns buyout by the Fed?
• The entire spectrum of bank stocks is hovering around their 52 week lows. Will these prices hold and catapult the stocks up indicating a bottom is at hand?

Until evidence conclusively proves my original thesis from one year ago incorrect I am staying with my initial conclustion there is no reason to move into these stocks. The level of unwanted financial assets is just too high and Bernake is showing absolute panic in his actions in the financial markets, if they break decisively through to new 52 week lows the market will follow with an even bigger break down than has been seen in many many years.


But if Bernake has played all the right notes and a big rate cut soothes all the fears the market should really rally and be strong from here led by the banking stocks and surpass the high of last Wednesday. I am positioned for and fear the market break scenario, primarily but I do remain alert that Bernake may possibly sneak calm into the market and allay all fears. In any case I think next week will provide a difinitive answer and not be a week of meandering around the recent mean.

The suspense is terrible, I hope it will last.

[al_bundy]

the final number was around 186 million shares trading, this is beyond belief. reminds me of the part in Cramer's book where he asks the CEO of Cendant how things are going and he is told they couldn't be better. Two days later they announce accounting problems and Cramer's $17 million stake in the company vanishes in an instant. he said his fund spent the day day trading it to minimize their losses


The Fed said the new lending facility is $200 billion. bear stearns isn't borrowing $200 billion. who else is in trouble?

and in the blogs i read they said what did bear in was Alt-A and not subprime. supposedly the Alt-A market crashed this past week because a lot of supposedly AAA rated mortgage bonds are having default rates in the 20% range. but SP said things are going to get better soon

[AltaRed]

So much for Bears Stearns. JPMorgan to Buy Bear for $2 a Share: Financial News - Yahoo! Finance It is likely only the first of a few more that are going to fail. Monday may be another brutal day for financial stocks.

[RockOn]

Quote:

Originally Posted by AltaRed So much for Bears Stearns. JPMorgan to Buy Bear for $2 a Share: Financial News - Yahoo! Finance It is likely only the first of a few more that are going to fail. Monday may be another brutal day for financial stocks.

Actually the SP Futures fell and then jumped on the news. You can never tel what the market will do, Bear is belly up, I lost 98% on the stock, but since they will not have to dump their paper on the market it's now a good thing. Go figure.

[Notmuchlonger]

I don't buy individual stocks. I don't trust my educational level in regards to stock picking. If you asked me Friday. I would have said Bear was a steal at 30.

[al_bundy]

Quote:

Originally Posted by RockOn Actually the SP Futures fell and then jumped on the news. You can never tel what the market will do, Bear is belly up, I lost 98% on the stock, but since they will not have to dump their paper on the market it's now a good thing. Go figure.

bloomberg.com has futures way way down

the whole deal puts a damper on ibank valuations

[al_bundy]

it will take a few days for the details to come out, but i wonder if they really bought bsc or just some assets they wanted. one of the blogs i read said bsc had a derivatives book who's value was in the trillions of $$$. that's a lot of risk to take on.

[ladelfina]

They have a nice building on Madison Ave., I hear.


oops! al, you already know that..
http://www.early-retirement.org/foru...7&postcount=42

[Patrick]

So what do you all think, time to buy some Bear near $2?

[al_bundy]

screaming buy

book value is like $80 a share and the dividend yield should jump to 25% or so

[Patrick]

Quote:

Originally Posted by al_bundy screaming buy book value is like $80 a share and the dividend yield should jump to 25% or so

It's already up to $4 in the premarket.

[al_bundy]

my guess is that it's a mad rush to cover short positions and the geniuses who bought 30000 $30 puts last week need to buy it up as well

never traded puts and from what i remember those guys now have the right to sell them at $30 a share or something like that

[al_bundy]

anything financial is down big in heavy volume today. some names like goldman sachs are already double normal volume. bear stearns is over 100 million shares traded already. in the last 7 days every share of bsc has been traded at least twice

i guess everyone who thought it was a great deal at $30 on friday doesn't think so anymore

[Maurice]

"Once in a Generation Opportunity to Buy Bank Stocks" - Says analyst at Punk Ziegel.


Not sure I agree... anyway, I'm already long bank stock.

[al_bundy]

too soon to be sure

[BUM]

Note to the technicians and the Bollinger Boys - KRE doublebottomed recently.

KBW Regional Bank ETF Making a Double Bottom? - Seeking Alpha




Time to pick me up some...

[al_bundy]

i don't have my book in front of me, but a double bottom is only complete once it goes above the middle whatever it's called in the W.

Double Bottom (Reversal) - StockCharts.com

and the volume isn't that good on KRE, volume always confirms everything

[Running_Man]

Whitney: Citi to cut dividend again - Mar. 28, 2008