As three of our most important banks get ready to report their results this week, we need to be focused on what are the reasons to own or sell these securities. The headlines will certainly be focused of the huge pay package of Andy Hall whose option was picked up by Occidental (NYSE:OXY) and Ken Lewis' massive retirement package from BAC. My opinion is that investors need to focus on the earnings power of BAC, C, and GS. These banks have the opportunity to emerge from the carnage as very profitable companies with great franchises that can reward shareholders with strong earnings growth over the next five years. In terms of headline risk from Ken Feinberg, hopefully he knows the difference between "high pay" and "underserved pay". By all accounts Andy Hall at Phibro had earned what was coming to him. The partners at Goldman also seem to deserve their "high pay" this year. These workers earned their shareholders billions in profits through their hard work and intellect. I would even go out on the edge and say Pankit deserves a few million this year. Love him or hate him, he certainly does not need to be swinging the bat each day for no pay. However, I do think the hundreds of millions being dished out to the AIG and BofA executives do deserve the scrutiny of Ken Feinberg who by most accounts did a very fair and thoughtful job with the 9/11 families. Give him a fair chance to represent the taxpayers again and determine what is sane when it comes to BAC and AIG. Let the headlines and debates begin but continue to buy or sell BAC, C, and GS for the right reasons.
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