As expected, Moody's cuts its ratings on 17 Spanish banks by one to three notches. The song...

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Herr Hansa Comments (2922)
 
We may be headed for a retest of 2008/2009 lows in some bank equities. I suspect any European Union response to be slow and after Greek elections (17 June). We may not see much happen before early July. Looks like a buying opportunity soon, but definitely high risk.
17 May 2012, 04:49 PM Reply Like

Hitesh Patel Comments (312)
 
Why buy bank stocks when they are ALL lieing to us. About thier mark to market bullshit, derivatives book, trading activities, etc etc. Who believes them? how many times can they make an ass out of investors
17 May 2012, 05:04 PM Reply Like

Herr Hansa Comments (2922)
 
You should never invest in any company you do not like or do not trust. Part of investing is staying within your comfort zone.
17 May 2012, 05:09 PM Reply Like

ajkeider Comments (52)
 
Thoughts on if STD cuts their dividend, and when?
17 May 2012, 06:29 PM Reply Like

Herr Hansa Comments (2922)
 
Maybe a reduction if the Spanish government pushes them, but they also have assets they can sell. Many banks are deleveraging in order to meet Basel II rules, but they have plenty of time to do that. The 2008/2009 low was just under 5.00 a share, and we are closing in on that. I will be buying below that, but not strictly for the dividend.
17 May 2012, 06:44 PM Reply Like

Hector Gonzalez Comment (1)
 
I'm not sure whether the dividends will be cut immediately or they will lag behind any future write-offs. Which still gives you about a year of dividend in the near future. Any thought on that guys?

As for adding a position on STD, I would definitely wait until a big event hits the market, unfortunately, their stock price has been beaten down enough, but I suspect we are no near a bottom. Although the options market seems to defer (check the June calls)

Thanks
17 May 2012, 10:47 PM Reply Like

Dibber Comments (1314)
 
The Spanish banks are nothing but leveraged Spanish sovereign debt receptacles. And they're all insolvent. And every day that Spanish sovereign debt prices fall, they become more insolvent. If any Spanish bank goes under and is forced to liquidate its Spanish bonds, that would be it for all of them. Meanwhile, Spain continues to deficit spend and issue more debt into a market where there's no demand, even at the short end of the yield curve. It's a highly precarious situation that could easily tip into complete financial chaos. The ECB will have to step in as early as this weekend.
18 May 2012, 05:57 AM Reply Like