Why Banks Will Continue To Get Healthier!
By Bob O'Brien on August 12, 2009 |
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You know things have gotten a lot better when one of the biggest concerns in the economy is commercial real estate, because six months ago this was something that was put to the back of the worry list and here it is at the fore-front. The regional banks may still have a lot of sweating to do, but do you really think they will be made to suffer? This is the bailout nation where everyone is a winner! Especially the banks!
Banks like JP Morgan Chase (NYSE:JPM), Citigroup (NYSE:C) and Bank of America (NYSE:BAC) have all been up quite a bit in the past couple of weeks on heavy volume. They are off today as I write this, with the Fed meeting over the next couple of days.
Here is why banks will continue to get healthier, but as always do your own analysis:
Real Estate: The home builders stocks have rallied significantly (XHB) and what’s good for real estate is good for the banks. As Real Estate continues to stabilize and foreclosures become less and less a problem the banks become more and more attractive.
Consumer: There has been a lot talk about the consumer lately, and yes the consumer is beaten down a bit, but still consuming none the less. Instead of charging things on their credit cards and being in denial about it, they are going out to eat to discuss their finances and charging the meal on their credit card.
Yield curve: The banks still have a great interest rate spread, and “Big Ben” Bernanke is not going to be raising rates anytime in the near future.
Government Back Stop: If the government was going let these banks fail they would have done it already, and they are obviously not. There is a lot of more room for growth now, and the economy is improving significantly.
Sure there may be a double dip recession, and there are a lot of bears that are denial about the fact
there will be a recovery and growth in the 3rd and 4th quarter of 2009. They have locked themselves into a pattern where all they see are bad things happening.
Be certain to take control of your Investing!
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Bernanke was the only cause, I proved, of the Great Recession and probably acted on purpose. He had the mean and motive (The gigantic power he has received.)
Worse, in light of the exercise of the central bank extraordinary power by Bernanke, I argue that he poses a real immediate threat to democracy, peace, privacy and individual freedom.
Given the immediate dangers that are evoked in these lines I strongly suggest that you revoke Bernanke.
“I will argue here that, to the contrary, there is much that the Bank of Japan, in cooperation with other government agencies, could do to help promote economic recovery in Japan.
Most of my arguments will not be new to the policy board and staff of the BOJ, which of course has discussed these questions extensively.
However, their responses, when not confused or inconsistent, have generally relied on various technical or legal objections—- objections which, I will argue, could be overcome if the will to do so existed.”
Prof. Ben Shalom Bernanke
Japanese Monetary Policy: A Case of Self-Induced Paralysis?
For Presentation at the ASSA Meetings, Boston MA,
January 9th, 2000.
“The slowdown in economic activity, together with high interest rates, was in all likelihood the most important source of the stock market crash that followed in October.
In other words, the market crash, rather than being the cause of the Depression, as popular legend has it, was in fact largely the result of an economic slowdown and the inappropriate monetary policies that preceded it.
Of course, the stock market crash only worsened the economic situation, hurting consumer and business confidence and contributing to a still deeper downturn in 1930.”
Governor Ben S. Bernanke
Money, Gold, and the Great Depression.
At the H. Parker Willis Lecture in Economic Policy, Washington and Lee University,
Lexington, Virginia.
March 2nd, 2004
Revoke Bernanke: Sign the Petition to Request from President Barack Obama That Ben ‘Systemic Risk’Bernanke be Removed From Office.
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