Have the Financial stocks hit Bottom ??

[SHELLY]

The question should be what are the banks that will thrive and prosper in the next cycle. These are the banks that have been thrown out with the bath water. I vote for JPM WFC BAC USB. I would avoid WB and all the bank stocks that are single digit midgets. The aforementioned have all gone up 30% plus in 2 days. The psychology on Wall St. will now flip to buy em on weakness. Next week BAC reports and they have already stated they will not cut the dividend. I suspect BAC will beat estimates and there will be another leg up in financials.

Goofer,

IMO there's a lot of short covering and speculating going on--happy days for traders (which I'm not). When I think about an environment where financials perform well, the near future ain't it. This pig has just begun making its way through the python.


Here's an interesting video from about 2 years ago (Sep 06). It's an interview with the Indymac CEO. As you view this take a look at 4 things: The numbers for the DOW and S&P, and the price of the Euro and oil (then look up those numbers today).




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[ame="http://youtube.com/watch?v=inzm6nwbii0"]YouTube - IndyMac CEO Interview CNBC[/ame]

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[30ashopper]

What percentage of bad loans does it take to bring a bank/lending instution down? Did I hear that the Freddie/Fannie fiasco is based on 1%? Can that be right?

5% and up would be a warning sign for any regional bank. Over 10% is a major concern. I think IndyMac was around 6.5%. There are banks out there right now with over 10% still "functioning".

Update - IndyMac was higher when it failed -

"The institutions (and their ratios) were Downey Financial (13.9 percent), Corus Bankshares (13.2 percent), Doral Financial (12.8 percent), IndyMac Bancorp (10.5 percent), FirstFed Financial (6.7 percent), Oriental Financial Group (6.12 percent) and Bank United Financial (5.4 percent)."

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/07/16/BUNK11PLV9.DTL&tsp=1

 

[maark]

I think IndyMac was around 6.5%. There are banks out there right now with over 10% still "functioning".

It appears that Indymac was pushed over the edge by the senator on the banking committee grandstanding and making public his concerns about one bank (Indymac). Very unscrupulous.. but he is a politician. The WSJ said that there were 1.2 Billion in withdrawals after his "news release".

If there is an investigation into Indy there should be one likewise into a senator with priveleged info talking to get attention. JMHO

 

[traderx]

It appears that Indymac was pushed over the edge by the senator on the banking committee grandstanding and making public his concerns about one bank (Indymac). Very unscrupulous.. but he is a politician. The WSJ said that there were 1.2 Billion in withdrawals after his "news release".

If there is an investigation into Indy there should be one likewise into a senator with priveleged info talking to get attention. JMHO

That would be Sen. Schumer.....

It all began on June 26th, when Schumer, a member of the Senate Banking Committee, wrote letters to bank regulatory agencies, urging they take steps to prevent IndyMac's collapse. Word of the story was spread quickly by the media and in the days that followed, depositors withdrew over $1.3B, resulting in the bank's failure on Friday July 10th.
After the bank was seized, the Office of Thrift Supervision [OTS] released the following statement describing the situation:

The OTS has determined that the current institution, IndyMac Bank, is unlikely to be able to meet continued depositors' demands in the normal course of business and is therefore in an unsafe and unsound condition. The immediate cause of the closing was a deposit run that began and continued after the public release of a June 26 letter to the OTS and the FDIC from Senator Charles Schumer of New York. The letter expressed concerns about IndyMac's viability. In the following 11 business days, depositors withdrew more than $1.3 billion from their accounts.
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[30ashopper]

It appears that Indymac was pushed over the edge by the senator on the banking committee grandstanding and making public his concerns about one bank (Indymac). Very unscrupulous.. but he is a politician. The WSJ said that there were 1.2 Billion in withdrawals after his "news release".

If there is an investigation into Indy there should be one likewise into a senator with priveleged info talking to get attention. JMHO

Democrats investigating democrats? Your kidding right? Schumer got off light on that one. Kicking off a major bank run that ended up being the straw that broke the camels back in the largest bank failure in U.S. History - quite the accomplishment.

 

[traderx]

Democrats investigating democrats? Your kidding right? Schumer got off light on that one. Kicking off a major bank run that ended up being the straw that broke the camels back in the largest bank failure in U.S. History - quite the accomplishment.

Well, he's quite the guy....:funn:

 

[goofer]

After today's massive rally and the FED, SEC, and US TSY's financial tinkering, have the financial stocks hit bottom ?

I guess they did.

 

[SHELLY]

I guess they did.

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[goofer]

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[SHELLY]

???

We went over this in Nov 2007 (about bank stocks bottoming).
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"Not to change the subject but..........bank stocks at this moment are either up or way off their earlier lows. the djii is off 180 points now. me thinks the financials have bottomed it is early but they are finally not going down on bad news. the worst may be over and the time to buy may be at hand."

http://www.sowal.com/bb/showthread.php?t=17184&highlight="BANK+STOCKS"&page=4

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I still don't see any value in the banks--as a matter of fact, there's still plenty of financial shoes left to drop before this is all over. The only reason many of the big financial institutions are still in business is because of taxpayer bailouts, "temporary SEC short selling rules," and their 24/7 access to the Fed printing presses.

Financial institutions are good fodder for traders--but because their fundamentals suck out loud, I wouldn't touch them at this time as an investor.