Fianancials shares rallied, yet fundamentals remain weak?
- Thread starter crgarcia
- Start date
Excellent Commentary
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Mark to market is no where close to being finished.
There is a value that has been taken out of real estate that is not going to be replaced anytime soon.
When banks are reporting, you really have no idea what cards they are still holding, or accounting rules they are playing.
The lack of credit is deflationary. Deflation kills the banks books.
The fed is paying foreigners with moreless a defaulted currency.
Prices are responding in the form of higher prices.
If the Fed raises rates, prices will come down.
Prices come down, more losses on the banks books.
The form of financing that caused the problem is gone with no replacement.
Thus the required adjustments after interest rates reach normalcy versus its peers, and after prices adjust downwards, will you see a base from which to work....
In other words , it will only be after a few interest rates raises that the books of banks can be properly valued, at which time there will certainly be fewer banks.
Another possibility is for the US gummint to become very austere....this is possible but not very likely....
This could take years....
.................................................................................
Mark to market is no where close to being finished.
There is a value that has been taken out of real estate that is not going to be replaced anytime soon.
When banks are reporting, you really have no idea what cards they are still holding, or accounting rules they are playing.
The lack of credit is deflationary. Deflation kills the banks books.
The fed is paying foreigners with moreless a defaulted currency.
Prices are responding in the form of higher prices.
If the Fed raises rates, prices will come down.
Prices come down, more losses on the banks books.
The form of financing that caused the problem is gone with no replacement.
Thus the required adjustments after interest rates reach normalcy versus its peers, and after prices adjust downwards, will you see a base from which to work....
In other words , it will only be after a few interest rates raises that the books of banks can be properly valued, at which time there will certainly be fewer banks.
Another possibility is for the US gummint to become very austere....this is possible but not very likely....
This could take years....
Priced in already?
Excellent Commentary, Turkeyneck
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Priced in already ?
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First ....the rallly was due largely to NSS being removed...some hedgies affected.....cannot fight with a wounded arm......
Many covered....lost their main tool....
Let's put it this way....
What could all banks/investment banks have in common ?
answer....cheaper is possible , and a change in the labels inevitable....
Why? leverage works for....and against.....
Buffett warned years ago.....
....................................................................
The only tools the Fed has now for the dollar are
austerity and raising interest rates.....
Guess which one first ? Austerity ?
...................................................................
Too many big events to go that are not known.....
...................................................................
Financing that created no longer there.....full effects
discounted ?
.......................................................................
.................................................................
Priced in already ?
.................................................................
First ....the rallly was due largely to NSS being removed...some hedgies affected.....cannot fight with a wounded arm......
Many covered....lost their main tool....
Let's put it this way....
What could all banks/investment banks have in common ?
answer....cheaper is possible , and a change in the labels inevitable....
Why? leverage works for....and against.....
Buffett warned years ago.....
....................................................................
The only tools the Fed has now for the dollar are
austerity and raising interest rates.....
Guess which one first ? Austerity ?
...................................................................
Too many big events to go that are not known.....
...................................................................
Financing that created no longer there.....full effects
discounted ?
.......................................................................
Quote from piezoe:
You know Krazy, you just might be right about that. Perhaps we have let the problems of a minority of financial institutions infect the whole darn lot. If that's true, then there ought to be some fantastic bargains out there. What do'ya say Karl, shall we go for'em?
My background is tech and energy so I'm hesitant to give any kind of authoritative comment on Financials. However, I think what we saw earlier this week was a fire[drill]-sale. The fact is that a good number of institutions have/had bad risk management and that the market will shake them out. I think there were some values out there on Monday.
Govt. bail-out? Well, the US bonds will eventually tell us if the exposure the govt. is taking on is a good or bad thing. There is wealth-transfer to be had either way.
There's a term for people/funds that were selling financials earlier this week: Bag Holders.
Regards,