Tranquilmeditation

5 Reasons Bank Shareholders Will Take a Hit

"Simplicity is the ultimate sophistication."
- Leonardo da Vinci

Thank you Mr. Schulman for sharing your bias free analysis. You won't read stuff like this from your Citi analyst.

Markets are often illogical but even more so now with all the Fed, Treasury and Congressional money sloshing around; $12.8 trillion in stimulus and loan guarantees. How do you calibrate an amount of money that large in an investment strategy?

You have to hold your wealth in something. Energy (the non-renewable kind) and precious metals seem to make the most sense to me in an investment climate clouded with volumes of white noise.

BofA, Wells Fargo: No Equity After Accounting for Bad Loans

Three Rules of Work:
1. Out of clutter find simplicity.
2. From discord find harmony.
3. In the middle of difficulty lies opportunity.
- Albert Einstein

Of the four remaining mega money centered banks still standing, Wells Fargo is the most attractive.

The future earnings power of Wells and JPMorgan Chase is immense. Earning $10 a share for each of these companies will not be hard when the economy normalizes. Let's not forget that banking is a hugely profitable business and has been in existence for hundreds of years.

The only reason I don't like JP Morgan Chase is their huge derivatives book. It is referenced as the largest in the world. When derivative contracts transact through a clearing house (I don't know why this is taking so long), and there is transparency, then JP Morgan Chase may be a strong buy.

BofA grossly overpaid for both Countrywide and Merrill. As stupid as they are, they still may survive this.

I looked up the definition of a zombie bank and found a picture of Citi. They are toast and will cost the taxpayers billions. Like AIG, Citi's losses are too overwhelming to shut them down right now. Citi were the stupidest and greediest guys in the room. A lethal combination that would be knee slapping funny if I wasn't an American taxpayer.

I know every one on this website is a trader but it might be more profitable to forget about tomorrow and anticipate where values might be 12 months from now.