Bank Stocks

[al_bundy]

ASBC the net income has been dropping for the last three years

[FinanceDude]

Quote:

Originally Posted by al_bundy ASBC the net income has been dropping for the last three years

I have a contact that's in upper management, they have been on an acquisition binge for a few years, and it ate up some of their margin.


Integration is now complete, and they are beginning to see the fruit of the acquisitions.........

[al_bundy]

now you have a get out of jail free card from insider trading charges

[FinanceDude]

Quote:

Originally Posted by al_bundy now you have a get out of jail free card from insider trading charges

I didn't trade on insider stuff, he won't tell me anything until 2 weeks after it's made public..........all he says is stuff like "things are ok".....and stuff like that. Plus,I never buy any of these stocks for MY portfolio........

[brewer12345]

Quote:

Originally Posted by al_bundy now you have a get out of jail free card from insider trading charges

Fortunately, the SEC is a teensy bit more sophisticated about these matters than you seem to be.

In my day job, I talk to company managements on a regular basis. They know I am representing a fund and I know that we all have to live within the boundaries of Reg FD (and I have to uphold the ethical standards of the CFA Institute as a charter holder). So we are all generally quite careful not to stray over the lines, although usually there is no harm in asking questions in the gray area (most managements will decline to answer those).

But just because we have to color inside the lines doesn't mean that investors can't ask questions and managements cannot answer. So management explaining to FD that their earnings have been depressed by the costs of integrating acquisitions is fair game, since they have doubtlessly told many others (possibly on a public conference call or even in an SEC filing) the same thing.

I used to work for a rating agency and back then I was considered an insider and not bound by the constraints of Reg FD. Then I was told a wide range of material, non-public information on a regular basis, including who was going to buy who and at what price. But since I was strictly forbidden from trading on any of this (and I would never have done so even if I wasn't forbidden), it was of no real import.

[al_bundy]

have to give it a few more days to be sure, but Citi, Goldman Sachs and Lehman are now below their previous lowest closing price. few other big financial names like Chase are very close

[Brat]

S&P down graded WAMU's credit rating today. If one includes after-hours trading it looks like it fell at least 8.2% today.

My gut says that they won't be able to dig themselves out of the hole they've dug and are holding off short sale approvals and foreclosure write downs.

Maybe because I live in a part of the country that hasn't been really slamed by foreclosres, I haven't seen many properties that were formerly owned by their mortgage clients offered for sale.

[twaddle]

Quote:

Originally Posted by Brat My gut says that they won't be able to dig themselves out of the hole they've dug....

The market obviously agrees with you.

Bloomberg.com: Worldwide


Contracts on Seattle-based Washington Mutual increased 158 basis points to a record 700 basis points, according to CMA Datavision.

Credit-default swaps are financial instruments based on bonds and loans that are used to speculate on a company's ability to repay debt. A rise indicates deterioration in the perception of credit quality; a decline, the opposite.

The article also gives the CDS rates on C (207), BAC and JPM (135), WB (305), and BSC (405).

I loved this quote:

``I've been in this market for 30 years, I'm one of the senior citizens of the bond market, and I have never, ever seen such a confluence of negative events,'' said Marilyn Cohen, who manages $215 million in fixed income investments as president of Envision Capital Management in Los Angeles. ``Clearly the Fed has been rendered impotent on doing anything to end this credit crisis.''

Hang onto your hats.

[Brat]

I haven't had the opportunity to read this FDIC document Savings and Loan Crisis and Its Relationship to Banking but first page contrasted with of the current situation is interesting.

[Freein05]

Having worked for 35 years in banking and the majority of it was in small banks, I do not invest in small banks. The term too big to fail is very true. The Feds could care less about a small two billion dollar community bank failing. They could never let B/A or Citi bank fail. Such a failure would drain the FDIC fund and case major financial problems.

I worked mostly in middle management and had dealings with board members. Most small bank board members have no idea what they are doing. When I left the last bank I worked at (I am FI now) two board members took me out to lunch and I told them the same thing - I do not invest in small banks and gave them my reasons. At the time I left the bank stock was selling for $35 dollars a share I exercised and sold my options the day I left. Today three years later the stock is under $12 a share and the bank is facing major problems. You can not tell what condition a bank is in by reading it's financial statement or listening to conference calls. Banks as stated before do not want to recognize problem loans. Small banks got into the housing boom not by financing home mortgages but by financing the builders. It is those construction loans that Fed is now forcing banks to write down. A small bank can not go to the Arabs for a bailout.

Bernanke said so the other day he said there will be more small bank failures this year. He is the head of the Federal Reserve Bank that regulates a lot of banks and he knows what his examiners are reporting back to the FED on the problems small banks are having.

[Hamlet]

Citibank may be too big to "fail", but that doesn't mean investors are going to come out well. They made massive numbers of bad loans. Those bailouts are massively diluting the existing shareholders.

Frankly, I'm more interested in a bank's lending standards over the last few years than a particular size.

Why buy Citibank over JP Morgan?

I would rather own US Bank or Wells Fargo than Citibank as well.

Citibank stepped with both feet into the foolish lending practices of the past few years. Why would I want to invest in a bank that shows such horrible judgement?

Quote:

Originally Posted by Freein05 Having worked for 35 years in banking and the majority of it was in small banks, I do not invest in small banks. The term too big to fail is very true. The Feds could care less about a small two billion dollar community bank failing. They could never let B/A or Citi bank fail. Such a failure would drain the FDIC fund and case major financial problems. I worked mostly in middle management and had dealings with board members. Most small bank board members have no idea what they are doing. When I left the last bank I worked at (I am FI now) two board members took me out to lunch and I told them the same thing - I do not invest in small banks and gave them my reasons. At the time I left the bank stock was selling for $35 dollars a share I exercised and sold my options the day I left. Today three years later the stock is under $12 a share and the bank is facing major problems. You can not tell what condition a bank is in by reading it's financial statement or listening to conference calls. Banks as stated before do not want to recognize problem loans. Small banks got into the housing boom not by financing home mortgages but by financing the builders. It is those construction loans that Fed is now forcing banks to write down. A small bank can not go to the Arabs for a bailout. Bernanke said so the other day he said there will be more small bank failures this year. He is the head of the Federal Reserve Bank that regulates a lot of banks and he knows what his examiners are reporting back to the FED on the problems small banks are having.

[Freein05]

Hamlet I don't disagree with what you say I was just pointing out if you don't want to lose your money stick with the big banks. Also those chasing high dividend yields better be careful because they can be cut in a second. You may be wrong about Wells Fargo they are one of the largest real estate lenders in the country. They are also a large servicer.

[Hamlet]

I'm saying that some of the smaller banks had tight enough lending practices to avoid most of the trouble the larger banks are having. I've invested heavily in TCF (ticker TCB). They didn't make many foolish loans. I think that they will avoid having a lot of defaults. The fact that they aren't huge is beside the point.

Wells Fargo has a balance sheet built like a fortress. They will have write-downs, but if they have problems that threaten their solvency, we're all going to be buying guns and canned goods anyway. Citibank would fail long before Wells.

Quote:

Originally Posted by Freein05 Hamlet I don't disagree with what you say I was just pointing out if you don't want to lose your money stick with the big banks. Also those chasing high dividend yields better be careful because they can be cut in a second. You may be wrong about Wells Fargo they are one of the largest real estate lenders in the country. They are also a large servicer.

[al_bundy]

a lot of bank stocks are up today, worthy of some looking into

could have been a bottom

[twaddle]

How many bottoms does that make so far? And how many more to go?

My prediction: the banks will get a bounce when the fed cuts. And then we'll see another wave of selling when cracks start forming in commercial real estate and LBO debt.

[al_bundy]

BAC and some others are showing strength, but C is down to it's 1998 Long Term Capital Management crisis days. next stop is the asian financial crisis and after that it's the mexican and the latin american crises.

if it doesn't go up from these levels, i think it will be the biggest fall in it's history from an all time high price

[al_bundy]

still watching it, but looks like for Citi next stop is Clinton vs Dole

[ladelfina]

whereas I'd be unlikely to buy C today.. I have a bunch from when they bought other bank stock that I have had since the '80s.. basis about $3k.. it's now $20k (well, as of last week) off from a high of $40k but according to Quicken along w/dividends that's still 15+% annualized. Should I pay CG on $17k and bail? Seems late in the game but I guess you never know when "too late" is.. I am such a buy and hold person and so lazy, too, that I dread thinking about things like this.

[al_bundy]

i don't what is going to happen next year or 10 years from now, but Citi did drop by something like 60% from 1987 to 1992 until Prince Bandar came to the rescue

The Fed is going to try to prevent a BK, but does anyone know how much they are exposed to with all the off-balance sheet junk they have?

[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.