Since it seems that we’ve unofficially declared today “Bank Thursday”, it may be worth taking a contrarians view for a moment.
Is it possible that banks, in addition to being toxic waste, are a good place to play “bank on the banker”?
A lot of emotion is moving bank stocks around. It could be a Costanza-type market where we see the worst names rally for a short time once Q2 numbers get released next month. Possible surprises? Everybody has priced in “Armegeddon, Q2” for the regionals. They’re even making a movie about it.
Given all this negative sentiment, there may be a surprise short term elevator up for these entities in turmoil, should the numbers come out “bad”, rather than “inherently evil”. It could be a tradeable bounce, perhaps. But even if we do see a bounce, eventually the greater reality will set in and those same names will revert back to their proper place in life.
If you are so inclined to play a hand of “Costanza”, you might check out those toxic banking names that do lots of biz in CA, FL and MI, where hoards of people are nursing their negative amortization mortgages along the way to bankruptcy court.
[[DSL]], [[SBCF]] and [[IBCP]] come to mind. There are others like [[RF]], as Hybrid has pointed out.(IBCP? Odd, no?)
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