Quote:
Originally Posted by wab
Brewski, are you betting on short-term rates dropping? All of the "cheap" banks I looked at without potentially serious problems are being squeezed by low margins.
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I think the Fed's next move is clearly a rate cut, especially if the RE market starts to come unglued. But I wouldn't want to put a big bet on it happening or try to pick the time and extent.
So take AF, which has been badly squeezed by the inverted yield curve. If the Fed lowers rates, it'll be happy times for them. If the pain goes on for too long or the Fed actually starts raising rates, they have a very obvious out: with a 68 YO CEO and no obvious successor, a sale is likely and this is one of the last great franchises left in a very attractive market. In the meantime, they will keep paying dividends and buying back stock.