Recap of Jim Cramer’s comments on Wall Street Confidential, Tuesday October 2. Click on a stock ticker for more analysis:
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Cramer calls TDBank’s acquisition of Commerce Bancorp a “natural fit” only the beginning of what he believes will be a larger trend of Canadian banks buying American banks such as Astoria, New York Community Bankcorp and Capital One. The matches are made in heaven, since the Canadian monetary and stock currency is strong, but they need deposits, and the U.S. is "riddled with deposits by companies that can't grow their business." While Canada avoided the U.S in the past because of the perception the U.S banks were overvalued and the Canadian loonie was undervalued, the loonie’s recent strength changes the landscape. While TD’s acquisition was wise, Cramer was critical of Citigroup’s taking over a bank in Tokyo which is "the worst market in the world. It's more mature than the U.S., which is hard to find and is led by a cast of people that don't favor great growth. That's what Citigroup does." Cramer notes even JPM isn’t making many acquisitions these days, which leaves plenty of room for the Canadians. While taking out Commerce Bancorp at nearly triple its value was “historically high,” Cramer commented, “ I believe that at three times, it does establish a new benchmark, if you can find banks that are equally as customer friendly." Cramer adds the Canadians are looking at banks mainly in the Northeast to get a hold on the New York area, “the only area in the country where real estate is going higher.”
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