Bank Stocks

[Running_Man]

Quote:

Originally Posted by VaCollector ....and then there's is my ER in May......with an inherited portfolio that is 75% BAC....down from about $55/share this time last year....and I've continued to buy (what I could) on EVERY dip in price that I was just SURE was the bottom....bought @$52....bought @49.50....bought @ $46....and now that I'm totally out of investable monies, is it time to "double down" and think about buying more on margin!??....nahhhh ....it was just a thought......I hope!! ...and it comes from all of the years of listening to the pundits......"buy on weakness"....."the time to buy is when everyone is running the other way".....wellllll...... Isn't THAT exactly where we are now ......so while I am NOT buying BAC on margin if I can keep my wits about me , I really do think that it just may represent that other thing we have all heard about...."the buy of a lifetime" ....or is it just a fool and his $$$ being parted.... ....forgot to add that Brewer and I are gonna laugh about all of this in another year or two...lighting our cigars with hundred $$$ bills, etc....(we hope!!)

I would hope you refrain yourself from buying on margin. My price target on BAC is 12, if it never gets there and the entire subprime mess reverses and banks make a dramatic reversal then perhaps I will reevaluate my outlook and price, but nothing that has happened from February on has changed my opinion that banks are a total catastrophic investment. Right now I am keeping on eye on that by watching HBAN and seeing if it drops to 10 and if BAC drops below it's multiyear low of 40.

If all is well and these things reverse course there will be plenty of time for me to buy at 50, it is inconceivable to me that the banks stops will just stop and make a reversal like a Google stock.

The banks and Bernake are saying it is getting worse and they don't know where the bottom is, the wisest and most experienced are really in a panic right now and are praying that rate cuts fix all. But how can the Fed cut rates with a collapsing dollar? Bernake knows he is in a pickle right now with all his tools not at his disposal.

[Running_Man]

As of this moment the Dow is down 24 points and I find it interesting KRE, and the DJIA are all hovering near the yearly lows. My theory is that if KRE makes a new low for the year we'll see another quick leg down again in the major averages. the continual lack of a bottom in the banking stocks would be a bad sign for the overall market.

[Running_Man]

And HBAN - Huntington Bank, is writing off all their earnings for 2007 in the fourth quarter due to writeoffs on mortage products issued to Franklin Credit and is listed for possible downgrade in financial strength by S&P. From the original post it is now down 20 percent. National City is down 24 percent KEY my least favorite since I began following this group in earnest is down 27 percent

BCS another name mentioned on October 5th as a good candidate for a portfolio is down 22 percent from that date.

There continues to be no evidence whatsoever in either price action or news from the groups the decline in these stocks are ending. Indeed stock after stock continues to come up with unexpected writeoffs.

[al_bundy]

i read a few banking industry reports last week. some said no biggie, others warned that things would get worse since it started with subprime, spread into alt-a and now into auto loans and credit cards.

reading some internet forums it seems some people are maxing out their credit cards buying stuff because they know once their ARM adjusts they won't be able to afford anything or get new credit.

[CCdaCE]

Quote:

Originally Posted by al_bundy i read a few banking industry reports last week. some said no biggie, others warned that things would get worse since it started with subprime, spread into alt-a and now into auto loans and credit cards. reading some internet forums it seems some people are maxing out their credit cards buying stuff because they know once their ARM adjusts they won't be able to afford anything or get new credit.

People actually make this statement? "I can't service the debt that I already have, or expect to have, so I'm adding more."

WTF. This I gotta see!

-CC

[al_bundy]

there was a post on fatwallet that someone knew someone doing this. forgot where else. if one person is doing it then others are as well.

[al_bundy]

Housing Market Tracker - Mortgage/Subprime-Related Stocks - Seeking Alpha

back in august i said we would soon see writedowns and layoffs. i said it would start in september, but i was off by a few months.

Rumor is Citi is going to lay off 45,000 people soon

[James5v]

You guys sound as if you expect some bad things to happen as we progress into the new year. Today, certainly was a lousy day.

I also heard on CNBC that CITI was going to lay off a large number of people.

I have often wondered how a middle class family affords 2 or 3 kids in school and several large SUV's parked next to their very large home, maybe they can't but just have not got caught yet.

[twaddle]

Quote:

Originally Posted by al_bundy back in august i said we would soon see writedowns and layoffs. i said it would start in september, but i was off by a few months.

Pretty good call. But I even gave this period a name last year. I called it "The Great Fall of 2007."

[Dawg52]

Wow. You guys know how to dig it out of the old crystal ball. How about writing a book or something so you can teach the rest of us.

[al_bundy]

Quote:

Originally Posted by James5v You guys sound as if you expect some bad things to happen as we progress into the new year. Today, certainly was a lousy day. I also heard on CNBC that CITI was going to lay off a large number of people. I have often wondered how a middle class family affords 2 or 3 kids in school and several large SUV's parked next to their very large home, maybe they can't but just have not got caught yet.

only if you assume it was bought in the last year or two

there are some great neighborhoods in the NYC suburbs where homes cost $700,000 and up these days and the schools are some of the best in the US. back in 1997 you could get a home there for less than $300,000. middle class family could have bought, refi'd in 2003 and now 10 years later after getting raises at work they can buy a nice car since their mortgage is probably less than $150,000.

or you could have bought something around 1997 and traded up later. my mom and her husband bought a 2 bedroom apartment in NYC for cash in 1998 for around $75,000. they sold in 2005 for $350,000 and paid cash for a house out west. in their building they have a lot of upper middle class people buy around that time when the price of their apartment was less than their salary. guy i went to school with who is a CPA bought in, VP at some big bank bought 2 2 bedrooms there in 2000 and combined them. the people who bought my mom's place are a NYPD detective and his wife who is a physical therapist or something like that. They make $180,000 combined income.

and i did some math and came up with a plan where you can buy Toyota's or Honda's for 15 years or so gradually building up higher trade in value and then trade it in for a Lexus or Acura and keep the payments the same.

i believe that history repeats itself and bankers make and write off increasing amounts of bad loans every decade along with running to daddy government and crying for a bailout or the end of the world is coming. 1980's was S&L along with Latin American Loans. 1990's was Mexico, Asia and Russia along with all the telecom loans to lay enough fiber optics for the next 50 years. i think most of it is still dark even though the loans have long been written off.

going back 100 years or so the Dow goes through cycles of 15-20 years of bull markets followed by 15-20 years of bear markets. the SP 500 confirmed this starting in the 1970's and this is the first full cycle for the NASDAQ.

[al_bundy]

looks like Citi is taking a $7.5 billion loan from the UAE at 11% interest

[Running_Man]

Quote:

Originally Posted by al_bundy looks like Citi is taking a $7.5 billion loan from the UAE at 11% interest

The terms are even better than that for the Saudi's. They get a convertible bond with converts to 5% of the company which at today's opening = 7.5 billion dollars while having a 11% yield that cannot be cut as a dividend w/o going into bankruptcy. Now go back over the last 5 years and compute how much money Citi spent buying it's own stock back at 50+ per share and you'll see the dumbest investors in the world run Citicorp.

[al_bundy]

you don't get anything less from a company that almost goes out of business every 10 years

People running it aren't dumb, totally the opposite. last few years they took home huge bonuses and if Citi goes belly up and they get fired they can live comfortably without working for the rest of their lives. in fact everyone involved made huge money off the fees in the last few years. i've heard mortgage brokers used to make over $100,000 a year easy. and now everyone can make a fortune shorting the stock

only losers are the suckers that bought the stock or the bonds issued by the company

[FinanceDude]

Quote:

Originally Posted by al_bundy you don't get anything less from a company that almost goes out of business every 10 years People running it aren't dumb, totally the opposite. last few years they took home huge bonuses and if Citi goes belly up and they get fired they can live comfortably without working for the rest of their lives. in fact everyone involved made huge money off the fees in the last few years. i've heard mortgage brokers used to make over $100,000 a year easy. and now everyone can make a fortune shorting the stock only losers are the suckers that bought the stock or the bonds issued by the company

Agreed..........

[kcowan]

For some good news, TD Bank just announced earnings of $1.40/share up from $1.04/shr and NO writedowns for subprime. (This is the Canadian bank that owns TD Ameritrade.)

[al_bundy]

does TD Ameritrade offer mortgages like Etrade did or just brokerage?

Etrade tried to play with the big boys and lost

[kcowan]

Quote:

Originally Posted by al_bundy does TD Ameritrade offer mortgages like Etrade did or just brokerage? Etrade tried to play with the big boys and lost

Just checking privileges on accounts and interest.

[AltaRed]

WM is the first major bank to cut dividend, in this case, by 73% UPDATE 1-WaMu cuts dividend and jobs, sets capital infusion | News | Market News | Reuters

[FIRE'd@51]

Quote:

Originally Posted by AltaRed WM is the first major bank to cut dividend, in this case, by 73% UPDATE 1-WaMu cuts dividend and jobs, sets capital infusion | News | Market News | Reuters

Freddie Mac cut its dividend in half, and Fannie Mae cut its by 30%. While they are technically not banks, I tend to view them as really big thrifts.