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What Do These Bank Have In Common?

|Includes: BAC, JPM, MS, Wells Fargo & Co. (WFC)

What do these three stocks have in common, JP Morgan (NYSE:JPM), Wells Fargo (NYSE:WFC), and Morgan Stanley (NYSE:MS) other than the fact that they are all banks? They are in financial problems in different ways. JP Morgan had its financial problems before it was known as they had a $2 billion loss in profit. This made investors pull away from the company as the bad earnings would result in price decline. Wells Fargo has had many different financial problems going from law suits to bad mortgage practices. Wells Fargo has been losing profit ever since it started filling out the checks to victims of bad mortgage practice from its employees. Also Wells Fargo lost a $13 million law suit to a small town for financial fraud. This has put revenue for the large bank for the quarter way below predictions also sending share prices down. Then for Morgan Stanley is the most recent problem with the Facebook IPO price. Though Morgan Stanley executive say they don't regret putting the IPO price at $38 a share, it is still affecting them financially as the distribution problems have caused law suits and from all this for Morgan Stanley the price might not hold much longer.

  • So as you can see the banks of America (not Bank of America (NYSE:BAC)) have had financial down fall, resulting in unsafe stocks to invest in and will only get worse as Europe (which already has problems for the banks as Europe, including its banks, have loans that they gave) and its banks (especially Spain's banks) are still increasing in debt. Also if Greece leaves the Eurozone and the EU has a fall then it will kill the revenue of the banks and the prices will drop like a rock.
  • So these banks (not like they have before) are not safe havens just like what happened to Gold ($GLD). These are very risky investments and have almost no chance of increasing. So don't invest in banks (in my opinion), unless you want your portfolio value to fall.