Wait a second, Bove is a bank bear? When did that happen? Apparently, he was and is now taking a victory lap around the asshatted bulls who swore that bank stocks were heading higher.
Guess what, jackass? They’re not.
Source: CNBC, authored by Mr. Bove himself
Stock buybacks are done for financial engineering purposes. The reality for banks is that capital is the core source of bank earnings. It is the basis of leveraging the bank balance sheet and making loans. If a bank reduces capital it lowers its ability to earn money; weakens its secular growth prospects. Why would anyone want to buy a company which is lowering its growth potential to play “stock market?”
Also, even though there is likely to be some easing in bank regulations, this is not key to results. At the moment, living under draconian regulations, which have effectively nationalized the banking industry, banks keep reporting record earnings as noted above.
At the most basic level, it is clear when evaluating any company the first issue is “How are sales?” “Are you selling your products?” For some odd reason, no one want to ask banks that question. Yet banks are like every other company. They have specific products – most importantly loans and capital market offerings.
They have to sell these products to grow earnings. In the past year, this has not been a positive development. Virtually every product they sell is either not selling or selling at a much slower rate than a year ago. This includes commercial and industrial loans, residential real estate loans, consumer loans, and even non-residential real estate loans. Trading stocks has not been great, and investment banking is slowing. Why should I or anyone else buy into a slowing sales cycle?
Plus, it is very important that the products that banks sell be of the highest quality. They are no longer in that category; bad loans are creeping up.
Bottom line, all the financial gimmickry and false hypothesizing in the world is not going to offset the very real fact that banks need to sell more products to bolster their stock prices. One hopes that they will do this. If they do then it will be time to buy these stocks.
Did you hear that, shit heads? The gig is up. You can no longer hide behind financial gimmickry. Dick Move just pulled your card and now you’re feeling all stupid, and shit.
As an aside, banks are higher by 0.4% today, completely ignoring the missives of a Mr. Dick Bove. My FAZ is off by 1%, but my XIV is trucking forward. It’s actually a pretty shitty bull market day, with just 61% of stocks green for the session.
If XIV doesn’t hit a new record high, I’ll eat the contents of a trash can on a livestream,
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“If XIV doesn’t hit a new record high, I’ll eat the contents of a trash can on a livestream” Turned backside to the camera of course to hide identity. Indeud. #FIZZFAZ
Dude XIV has made me mad coin. Fly, sometimes your wrong but when you’re right, you nail it. 5 years strong on this blog and I will say that reading IBC has become a part of my day. Thanks for your content
Would you consider eating a steak instead?
Here comes MARIA. No climate change here folks!
http://www.climatecentral.org/news/climate-change-unseen-50-million-years-21312
The only thing that matters is the yield curve. The rest is gibberish.
Bingo
Ooh ooh yea … “Bingo!!” Tool.
Hey there fat fag. Bald too, no?
With mathematical certainty, a long list of banks were going to go to $zero during the financial crisis. The only assets they had were the powerful people they owned – – that was enough.
$C is a monster
Been with $C for a while.Thinking of selling now.
What to do,what to do