You know things have gotten a lot better when one of the biggest concerns in the economy is commercial real estate, because six months ago this was something that was put to the back of the worry list and here it is at the fore-front. The regional banks may still have a lot of sweating to do, but do you really think they will be made to suffer? This is the bailout nation where everyone is a winner! Especially the banks!
Banks like JP Morgan Case (
JPM), Citigroup (C) and Bank of America (
BAC) have all been up quite a bit in the past couple of weeks on heavy volume.
They are off today as I write this, with the Fed meeting over the next couple of days.
*****Question of the Week! *****
(Take a shot!!….Chance to Win a FREE ETF Course (
VALUE: $200!!) by Emailing Us your answer no later than Friday 9AM EST and 3 Names will be randomly picked and named as Winners!! (Must be a blog subscriber) The Homebuilders ETF (XHB) is up over 50% in the last a month, a sign that the Real Estate market has bottomed. Do you believe that the Real Estate market has bottomed? a) No, the Real Estate market has further to drop b) the Real Estate market has bottomed c) the Real Estate market is going to start to appreciate again d) the Real Estate market is going to take off and soon we will have another bubble
Here is why banks will continue to get healthier, but as always do your own analysis:
Real Estate: The home builders stocks have rallied significantly (
XHB) and what’s good for real estate is good for the banks. As Real Estate continues to stabilize and foreclosures become less and less a problem the banks become more and more attractive.
Consumer: There has been a lot talk about the consumer lately, and yes the consumer is beaten down a bit, but still consuming none the less. Instead of charging things on their credit cards and being in denial about it, they are going out to eat to discuss their finances and charging the meal on their credit card.
Yield curve: The banks still have a great interest rate spread, and “Big Ben” Bernanke is not going to be raising rates anytime in the near future.
Government Back Stop: If the government was going let these banks fail they would have done it already, and they are obviously not. There is a lot of more room for growth now, and the economy is improving significantly.
Sure there may be a double dip
recession, and there are a lot of bears that are denial about the fact
there will be a recovery and growth in the 3rd and 4th quarter of 2009. They have locked themselves into a pattern where all they see are bad things happening.
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