The Bank Stank

The banks surged off of the lows earlier in the month. Many realized that the banks would be able to book accounting profits due to a lowering of reserves. The problem is that there are too many people like myself who will not touch these banks no matter what they claim to earn. So all the people who foresaw the profits have nobody to sell to.

I don't believe the executives at these banks have a clue how to value their loans and neither do I. It doesn't matter what they report, I will not be a buyer. In addition, the housing market has recently taken a nosedive and the economy is slowing. Long rates are down, so net interest margins will be compressed. That is certainly not in second quarter numbers.

1 comment:

Anonymous said...

Even if they could value their loans properly and honestly, what is their incentive to do so?