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"Time is running out" for bank managements to prove their low stock valuations are only...

"Time is running out" for bank managements to prove their low stock valuations are only short-term, says Mike Mayo. He again suggests breaking up the big banks will improve their stock prices, citing surging price-to-book values following the introduction of Glass-Steagall in 1933.
Comments (8)
  • The lobbyist for Citibank had Glass-Steagall repealed so that they could get the mega-deal with Travelers Group approved in the late 90's.

     

    The big banks lack of transparency (i.e. credit derivatives) and shady dealings make them extremely risky investments as they are "black box" operations.

     

    How about re-instating Glass Steagall since it was put in place to prevent another Great Depression. What a coincidence that it is repealed and 10 years later we have the "great recession".

     

    The big banks will destroy capitalism if they are left to run amok. They do not deserve to trade at higher valuations considering how they nearly destroyed the world capital markets.
    2 Jan 2013, 12:20 PM Reply Like
  • Mike Mayo must have just read SHOCK EXCHANGE How Inner-City Kids From Brooklyn Predicted the Great Recession and the Pain Ahead (http://bit.ly/VundWO) which says that (i) a return to Glass-Steagall is almost a certainty and (ii) the public vitriol and fallout from having spent trillions in taxpayer funds for a failed business model will be immeasurable. SHOCK EXCHANGE is available electronically and at St. Mark's Bookshop, Greenlight, and Word Bookstore.
    2 Jan 2013, 12:22 PM Reply Like
  • And history repeats itself once again.... Glass-Steagall made a lot of sense for many reasons (including this one).
    2 Jan 2013, 12:25 PM Reply Like
  • SHOCK EXCHANGE explains the atmosphere that spawned Glass-Steagall, the atmosphere and the different agendas for overturning it and the "pain ahead" for the financial markets and U.S. economy. It is a must read http://bit.ly/VundWO .
    2 Jan 2013, 12:29 PM Reply Like
  • they will get their stock prices back up.....the Fed will help them out....and they will buy back their own stock...but I am all for Glass-Steagall again...and even more...no more black pools..no more hidden derivatives
    2 Jan 2013, 12:34 PM Reply Like
  • Oh dance in the dark of night, Sing to the morning light.
    The magic runes are writ in gold to bring the balance back. Bring it back.
    2 Jan 2013, 12:42 PM Reply Like
  • A return to an absolute division between commercial banking and investment banking will most likely result in even more concentrated credit risk at the commercial banks.
    2 Jan 2013, 01:00 PM Reply Like
  • On Dec 5th, Mike Mayo stated on Fast Money, that C was a going to raise its dividend by April, and is the stock to own" right here, right now". If you don't want to own JPM, C,BAC,GS or MS, maybe you would like to look at some of the regionals. Crammer, likes KEY, I also like KEY, and might purchase some on any pull back in it. HBAN trades at book, CINF has a great chart. PNC is also a solid bank and made good acquisitions in the down turn. MTB is another to look at. For me the best in breed is run by Larry Fink, BLK. How about a Chilean Bank, BSA or maybe a Canadian bank TD. I remember Canada having its problems, they made it through. One thing I would like to add is the fact of something Jamie Dimon said before it truly all fell apart, MR. Dimon stated " I would not be a buyer of my stock right now"., it was trading at the 36.,32. level. Certain elected officials were shorting the financials upon hearing of the problems of AIG, and that was before we the average Joe knew. The C.R.A. Act did not help. Christopher Cox's move on letting the banks lever up so also did not help. If you haven't purchased any of the financials, you will have your turn too buy, maybe in March after earnings season. It could be after the Feds review. You could always pyramid in, purchase you first order at maybe 25 shares and then purchase more as it comes in, as long as the fundamentals are sound. Thank You and Good Luck. I own HBAN and I have a small posistion in BAC.
    2 Jan 2013, 08:23 PM Reply Like
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