Prior to the financial crisis, the Federal Reserve bought minuscule amounts of U.S. government debt. In 2011, the Federal Reserve bought 61% of all net U.S. Treasuries issued (source: Wall Street Journal, Mar. 27, 2012).Reread that again, dear reader, to absorb its full meaning—61% of all issued U.S. Treasuries were bought by the Federal Reserve last year.Before the financial crisis, it was foreign countries that were the. Read More
The big banks have steadily recovered since the Lehman Brothers collapse in late 2008 that sent bank stocks in a punishing downward spiral, which inevitably required hundreds of billions of dollars in bailout funds from Uncle Sam to save the U.S. banks from collapse.In my view, this chaotic event was an opportunity that may surface only a few times and times of chaos are when you could make big. Read More
As if the big U.S. banks didn’t have enough trouble.Besides the large U.S. banks’ exposure to Europe and to the derivatives on their balance sheet (off-balance sheet items, which is why no one can evaluate what they’re really worth), there is another issue—a lawsuit—that could cost the big banks billions of dollars and negatively impact their corporate earnings in a significant way.There is a private antitrust lawsuit that. Read More
Back in October of 2009, I wrote a scathing editorial in the pages of PROFIT CONFIDENTIAL on my dislike for Bank of America Corporation (NYSE/BAC) stock (Why I Don’t Like the Bank Stocks). Back then, Bank of America stock was trading at $17.00; today it trades at $5.37. I still don’t like the stock.
I was in Miami last weekend and realtor after realtor was telling me that the biggest condo building bust in history has bottomed out and is rebounding with the U.S. housing market. Buyers are snapping up properties, one-third of them paying cash, and the best deals are gone.Not sure I believe them. Or should I rephrase that as, “Not sure they understand.”We all remember when banks pulled way. Read More
The big news yesterday: Fitch Ratings service comes out and issues a warning for U.S. banks. Fitch may lower its credit ratings of the large U.S. banks if the eurozone debt crisis is not resolved. U.S. bank stocks got hit hard on the news. Bank of America Corporation (NYSE/BAC) stock now trades at $5.90 (I wrote months ago that I wouldn’t touch this stock).
The big U.S. banks must be ecstatic.
After 100 people at the Federal Reserve ended their review of major U.S. banks, the Fed concluded that some of the largest banks in this country could increase their dividends, buy back shares and repay government loans.
All the news this morning is about JPMorgan Chase & Co. (NYSE/JPM) reporting that it made $4.8 billion in profit in its fourth quarter of 2010, beating analyst expectations again.
Wednesday, I wrote how I was immediate-term bullish on the stock market. My three main reasons for being bullish: corporate earnings for the third quarter would surprise on the upside; a cloud of investor pessimism still prevails over the market; and stocks are simply attractive compared to U.S. Treasuries that offer little to no return and that may be our next bubble to burst.But, in the short term, for. Read More