cramsib

Time to Buy Bank Stocks

the problems with the banks is structural. it's not a panic and their assets are not going to increase in pricet hrough government subsidies. there is no price discovery for these assets simply because of the assumption that uncle sam will backstop their losses. i don't the government will. the free market needs to take its course zombie banks need to fail, then the private sector will come in and bid. the sooner we come to grips with the fact that some of the major banks are insolvent, the sooner the healing process will begin. you have to allow the weak to fail in order to save the system and recapitalize it. i would venture and say that the takeover of citi and the placing of bac in a temporary receivership of sorts will actually be a turning point for the healthier bank stocks and even etf's like uyg who only hold a total of appx 5.50% of bac and c stock. money markets will not seize up like in sept with lehman's failure. numerous fed programs are in place to safe guard that and cds markets are much smaller and with a clearing process in place (one we didn't have last september), the shock won't have any awe. let the zombies go and concentrate on the healthy banks. if citi and bac's retail franchise is so valued, i am sure that the private sector knows that and will bid for them accordingly.