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Bank Of America Is Positioned To Excel Amidst Crisis
Summary
Bank of America has a much lower risk loan portfolio than it is given credit for by most analysts.
Many seem to not be taking into account the fact that the new CECL guidelines require banks to provision for all expected losses over the life of the loans.
The fact that BAC made $4billion, despite a massive reserve build during this crisis, highlights its huge Pretax pre-provision earnings power that will carry it through the crisis.
https://mail.google.com/mail/u/0/#inbox/FMfcgxwHMsPTHRmnPbMcRJcPSSTQlgbg
TY for that bit of information.I haven't been looking at bank stocks as of late. Maybe it's time for another peek.
The top gainers list Thursday was loaded with bank and finance related stocks.
https://www.barchart.com/stocks/performance/percent-change/advances
Hmmmmmmm, I've also been holding shares of RIBT for a while now. CIBH might be thinking of charging me with bigamy. LOL
Hey, much better off being married to CIBH than RIBT
Every now and then I get the urge to look at banks and check on a few I considered in the past. Thus far, the urge to own another bank stock quickly passes and I go back to pondering a blown bridge hand or something else as equally useless. For now, being "married" to CIBH is enough bank for me and probably will be for a while to come.
Every now and then I get the urge to look at banks and check on a few I considered in the past. Thus far, the urge to own another bank stock quickly passes and I go back to pondering a blown bridge hand or something else as equally useless. For now, being "married" to CIBH is enough bank for me and probably will be for a while to come.
10-year T-bond yield=1.328%—lowest-ever close:
https://www.wsj.com/articles/bond-markets-signal-investors-jitters-on-global-growth-11582629020
The 10-year T-bond also reached an all-time low intra-day yield of 1.310% today.
The 30 year broke a record low Friday.
Wall Street Banks, Insurers Sell Off — Dangerously Linked by Derivative Trades
posted by basserdan at another iHub board
By Pam Martens and Russ Martens
February 25, 2020
If the federal government wants to quarantine the most dangerous threat to the financial health of the United States, it will impose a lockdown and decontamination of the federally-insured banks that are holding tens of trillions of dollars in derivative trades. Yesterday, the stock market rout outed the worst of these actors.
While the Dow Jones Industrial Average fell a hefty 1,031.61 points, that was only a 3.56 percentage point loss. The S&P 500 was off by 3.35 percent. The decline in the broader averages looks tame compared to what happened to some of the biggest banks on Wall Street and their derivative counterparties.
Morgan Stanley tanked by 5.23 percent; Citigroup was off by 5.12 percent; while Bank of America closed down 4.74 percent. JPMorgan Chase and Goldman Sachs magically trimmed their losses during the trading day, closing down 2.69 percent and 2.64 percent, respectively. (Both JPMorgan Chase and Goldman are the targets of criminal probes by the U.S. Department of Justice, making their mild declines yesterday, compared to their peers, a bit hard to swallow. Both banks own Dark Pools where they are allowed to trade their own stocks.)
Why did the Wall Street banks trade so much worse than companies that are experiencing supply chain disruptions from the coronavirus? Other market activity strongly suggests that there is a critical problem with the banks’ counterparties to their tens of trillions in derivative trades.
The most recent report from the regulator of national banks, the Office of the Comptroller of the Currency (OCC), shows that as of September 30, 2019 these five Wall Street behemoths held the following amounts of notional derivatives (face amount): JPMorgan Chase held $54.9 trillion; Goldman Sachs Group accounted for $50 trillion; Citigroup $49.4 trillion; Bank of America $39.3 trillion while Morgan Stanley sat on $36.2 trillion. Just these five bank holding companies represented 85 percent of all derivatives held by the more than 5,000 Federally-insured banks in the U.S.
Wall Street banks’ interconnections to derivatives was a major cause of the financial collapse and freezing up of credit in 2008. Wall Street banks’ using the big life insurer, AIG, as a major derivatives counterparty (meaning it took the other side of their derivative bets) resulted in a $185 billion bailout of AIG by the federal government.
None of that, sadly, has enlightened Congress to reform the situation. According to the 2017 Financial Stability Report from the Office of Financial Research (OFR), the federal agency created under the 2010 Dodd-Frank financial reform legislation, these insurers are among those that have derivative ties to Wall Street: Lincoln National Corp., Ameriprise Financial, AIG, Prudential Financial, and Voya Financial. Three of those names experienced worse losses than even the Wall Street banks yesterday: Lincoln National dropped a whopping 7.81 percent; Ameriprise closed with a loss of 6.25 percent; AIG shed 5.97 percent; Voya gave up 5.16 percent; while Pru closed with a loss of 5.15 percent.
The 2017 OFR report explained the derivative linkages between the Wall Street banks and the insurers this way:
“…some of the largest insurance companies have extensive financial connections to U.S. G-SIBs [Global Systemically Important Banks] through derivatives. For some insurers, evaluating these connections using public filings is difficult. Insurance holding companies report their total derivatives contracts in consolidated Generally Accepted Accounting Principles (GAAP) filings. Insurers are required to report more extensive details on the derivatives contracts of their insurance company subsidiaries in statutory filings, including data on individual counterparties and derivative contract type. But derivatives can also be held in other affiliates not subject to these statutory disclosures, resulting in substantially less information about some affiliates’ derivatives than required in insurers’ statutory filings.”
The derivatives carnage yesterday didn’t stop at just the Wall Street banks and the insurers. It enveloped a foreign bank that is a major counterparty to Wall Street’s derivative trades – the big German lender, Deutsche Bank. Its stock closed down 5.86 percent yesterday. (For important background, see our report: The Repo Loan Crisis, Dead Bankers, and Deutsche Bank: Timeline of Events.)
The market sent a critical message to Congress yesterday: you have not fixed the dangerous contagion problem on Wall Street. Is Congress paying attention? If you look at the schedule of hearings for the House Financial Services Committee for the upcoming month of March, it apparently believes that the big threat to financial stability is Wells Fargo – a bank with a small derivatives footprint compared to JPMorgan Chase, Goldman Sachs, Citigroup, Bank of America and Morgan Stanley.
Maxine Waters, Chair of the House Financial Services Committee, who has otherwise done an outstanding job of conducting hearings on critical financial topics, has become lost in the weeds when it comes to Wells Fargo. She has scheduled three, repeat three, separate hearings this month on Wells Fargo. Is Wells Fargo a felon bank? No. However, JPMorgan Chase has pleaded guilty to three criminal felony charges in the past six years and is currently under a criminal investigation by the U.S. Department of Justice for running a racketeering enterprise out of its precious metals trading desk. Goldman Sachs, which ranks second to JPMorgan Chase for derivatives exposure, is also under a criminal investigation by the DOJ for its role in a bribery and embezzlement scheme in Malaysia known as 1MDB.
What Wells Fargo did in incentivizing its employees in such a way that they opened millions of unauthorized customer accounts in order to get bonuses was, indeed, a very bad thing. But it’s already been the subject of countless hearings and fines and recriminations. Wells Fargo’s historic pattern of misconduct pales in comparison to the proven criminality at JPMorgan Chase. It’s time for Congresswoman Waters to address the real ticking time bomb on Wall Street – the derivative holdings of the big five Wall Street banks and their fundamentally weak counterparties before there is another 2008-style Wall Street implosion that takes down the U.S. economy and catches Congress napping.
https://investorshub.advfn.com/secure/post_new.aspx?board_id=25217
Here It Is: One Bank Finally Explains How The Fed's Balance Sheet Expansion Pushes Stocks Higher
https://www.zerohedge.com/markets/here-it-one-bank-finally-explains-how-feds-balance-sheet-expansion-pushes-stocks-higher
Thanks Salty, there could be some nice opportunities ahead
China Is Driving American Banking Into The Twenty-First Century
Jan. 22, 2020
https://seekingalpha.com/article/4318262-china-is-driving-american-banking-twenty-first-century
13 Changes Coming To The Banking Industry
https://www.forbes.com/sites/forbesfinancecouncil/2020/01/02/13-changes-coming-to-the-banking-industry/
Alan Jackson - Are You Washed In The Blood / I'll Fly Away
Lots of gibberish, can he sing? He sounds kike a cross between hawks and poem and never shuts up.
Scroll to the 17:10 mark>>>>>
https://www.youtube.com/watch?v=UhOjzIPH_Vk
This guy reminds me of a few bankers I have run into over the years. LOL
Ocellated Turkey strutting his stuff - Chan Chich Lodge, BELIZE
Super!!!!!!!!!!
Sent you an email
It does look good.
DRR still forming a solid base
https://www.barchart.com/stocks/quotes/DNR/overview
Was wondering if the fish got you? Welcome back!!!
My thoughts are that DNR is going to do well.
I put a whackin' on a mean, nasty bunch of two pound monsters over the last few days.
Some stocks are "All Mirrors" DNR looks real
Angel Olsen - All Mirrors (Official Video)
https://www.youtube.com/watch?v=Jjt698Zv5jQ
DNR is not soaring like a mighty buzzard YET, but it is forming a solid base.
https://www.barchart.com/stocks/quotes/DNR/overview
Fifth Dimension - Up Up & Away , My Beautiful Balloon
https://www.youtube.com/watch?v=HfxqQmWtGNM
Well, it's up 6 cents at this point which is a good start but still a ways off from soaring like a buzzard. I was thinking that, at a minimum, the pps would roll past a buck ten today..... Hmmmmm, I guess there's a reason why people never think of me when discussing what traits people like Warren Buffet possess. LOL
I'll probably buy into GTE again come Thursday or Friday of next week.
"Soaring like the mighty buzzard"? Sounds like a good name for a country western song?
You might want to put DNR on your watch list. I think that it's just about to begin soaring like the mighty buzzard.
Amen Bro, I think you're right about the buck support level.
My one sure regional is this coming summer in Columbia. I might play in a New Year Regional at Myrtle Beach if I can get my favorite partner from West Virginia to come down.
That $1.00 range seems like good support again?
https://www.barchart.com/stocks/quotes/GTE/overview
Hey Salty, aren't you over due for a Bridge tourney?
I got a 5th quick flip out of GTE today. ...... I'm beginning to think GTE might make for a good stock to hold for a while as well as a flipper. Even if oil should drop below $50 I doubt that it stays there long. I think we're more likely to see oil playing around the $60 range for a while to come.
I'll probably hop back in it tomorrow. At this point I'm thinking I'll be able to get quite a few flips out of GTE.
$GTE, Looks like $1.00 is support.
https://www.barchart.com/stocks/quotes/GTE/overview
"Flipper" must do well buying sticks, he has a bank account>>>
https://www.youtube.com/watch?v=VNrdefsoXbw
If you like "flipper" stocks then you might find GTE interesting. I've bought and sold this little bugger three times over the last few weeks.
I've got life by the tail and Ima pullin' hard!!!!!!!!!!!!!
Hope you have been doing well too.
Top of the Mornin’ y’all!!!
Hope everyone is doing well.
If you owe the bank $100, that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.
John Paul Getty
If a banker and a lawyer were both drowning and you could only save one, would you go to lunch or read the paper?
If bankers can count, how come they have eight windows and only two tellers?
A man visits his bank manager and asks:
– “How do I start a small business?”
The manager replies:
– “Start a large one and wait six months.”
“Little Johnny, what do you want to be when you grow up?”
“I’m gonna follow in my dad’s footsteps and be a cop.”
“Is your dad a cop?”
“No, he’s a bank robber.”
Swiss bank. A guy whispers:
– “I want to open a bank account for 2 million dollars.”
Swiss Banker answers:
– “You can say it louder. In our bank poverty is no crime.”
https://humoropedia.com/20-best-banker-jokes/
We're just all sitting around and waiting on the next huge banking crisis to happen. This board will get lively then. LOL
Bank Holiday? Rather quiet here.
Good little bank trading under BV while growing assets and earnings.
I looked at BAYK a few years back but never bought shares.
ALBY is another outstanding bank. Thanks for the heads up. See you at $20
Lazarus,
Shareholder of BAYK but don’t see $15. Bay Bank does not have “incredible” performance ratios actually more below peers.
Read through AB&T (ticker ALBY) 2nd quarter news release. Much better on all fronts and trading well below book value like BAYK. Posted on ALBY board FYI
Good luck
See you at $15-$18
it'll be stair stepping up soon enuf.
If you know anything about banks you would know that this is a buyout candidate.
$BAYK If the 8, 34, and 50 day moving averages hold, it could be good.
https://stockcharts.com/h-sc/ui?s=BAYK&p=D&yr=1&mn=0&dy=0&id=p64074653513
They probably need to double up on it. LOL
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