Call me crazy - I want to buy banks!

[timscott]

C screwed, BAC probably, COF dead.

But amidst the maimed and dead there have to be survivors that will benefit from this mess.

And at this point it looks like ALL banks have been thrown out. The proverbial baby with the bath water.

I don't like the monster big banks.

I like BBT MTB TD PNC USB, buying a bit in each. Not calling a bottom, just dipping a toe.

PNC has much less exposure to toxic assets / didn't get involved with as many bad loans because housing in their servicing area did not go as nuts.

TD - Canada same thing - housing bubble did not balloon as much. Growing deposits.

MTB - took very little TARP, I think they were asked to take it. Growing deposits because they are viewed as healthy, profitable last Q.

USB - unjustly punished, they picked up all the GOOD assets on their last acquisition and none of the bad, did not over pay.



If you know something I don't on the above (big red flags) = please post.


You have any picks - lets see em.

 

[trendy]

I don't follow the banking sector that close, but PNC bought National City, one of the top sub-prime lenders. So, I'm not so sure that it doesn't have considerable exposure to toxic assets.

 

[timscott]

did they buy NCC outright or just assets?

 

[bond_trad3r]

Time to buy is when blood is in the streets.

 

[trendy]

Quote from timscott:

did they buy NCC outright or just assets?

Outright. NCC didn't fail, so this was not a situation where the FDIC assumed the debt and sold the assets. Actually, NCC got totally screwed by the Fed. gov't. They were told not to expect any TARP money, for whatever reason, and thus was left with no alternative but to be acquired for pennies on the dollar. Me thinkst there was some funny business going on there.

 

[option_trad3r]

Please correct me if I'm wrong, but I think the housing bubble in Canada is worse. An extreme example - it was around $600k for a cardboard box in Fort McMurray, Alberta. Not to mention Vancouver, Edmonton, Calgary, etc.

Quote from timscott:

TD - Canada same thing - housing bubble did not balloon as much. Growing deposits.

 

[ljyoung]

FWIW I've been a USB depositor for many years and these guys are so tight they would make a Canadian banker, let alone a Scotsman (Oh RBS, how did it all start and when will it all end) look like profligate spendthrifts. So if they really didn't get too much into the subprime swamp (ALWAYS hard to know till the books be opened and that ain't going to happen anytime soon), a cautious buy might be in order. Risky so have a tight stop and then, like some guy above said, wait till the blood (in the case of bankers, it is of course blue) flows, ebbs and preferably is staunched.

lj

 

[Debaser82]

How bout HSBC?

Cheers.

 

[FanOfFridays]

Quote from option_trad3r:
Please correct me if I'm wrong, but I think the housing bubble in Canada is worse. An extreme example - it was around $600k for a cardboard box in Fort McMurray, Alberta. Not to mention Vancouver, Edmonton, Calgary, etc.

There's no way it's worse in Canada than in the U.S. Picking Fort Mac as an example is like picking Vegas after gambling is outlawed. It's not indicative of the overall situation in Canada. 3 of the 4 cities you mentioned are in Alberta which is inordinately affected by the drop in crude.

In other major Canadian cities prices have come off but not as much as in the States. There will almost certainly be a gradual drift downwards over the next 12-18 months.

 

[option_trad3r]

I guess they're still in the 'denial' phase of the bubble..

Quote from traderNik:

There's no way it's worse in Canada than in the U.S. Picking Fort Mac as an example is like picking Vegas after gambling is outlawed