Now that the government has stepped in, is now the time to buy bank stocks?
Answers
106 points
dfgbn567 answered 2 months ago …
my feelings were yes, but the real truth is out there yet
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dfgbn567 answered 2 months ago …
i thought yes, but believe its a roller coaster
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dfgbn567 answered 2 months ago …
is all this nervous activity worth it since, grey hairs are the big perk
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671 points
rvilmur answered 2 months ago …
No I don't think so. WaMu failed overnight and there are many more banks on the Federal Reserve watch list which they won't publish so that there are no fast deposit removal runs on those banks. There are probably many more banks that are shakey than the 170 on the Fed list. Way to soon to invest in most banks with the possible exceptions of Wells Fargo, JP Morgan Chase, and Bank of America who are in good enough shape to pick up the bones of the failed banks.
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160 points
KenTrester answered 2 months ago …
Only if you are a very nimble day trader who can navigate extremely short-term trades.
The bailout may provide a temporary floor for stock prices. And a small bounce may ensue off that floor as we head into the first week of a new month a few days from now.
However, most analysts agree that the underlying cause of the credit crisis stems from falling home prices, which caused foreclosures to increase and eventually exposed the house of cards in the financial sector.
The deflationary descent also caused equity lines of credit to become almost non-existent. Combined with rising unemployment and stubborn energy prices, it's hard to envision consumers or investors bidding up sustainable prices of anything in the immediate future.
Options traders are in the best position for this market, but even options strategies may need a little tweaking.
Option buyers should continue to take smaller positions than you normally do, even when buying puts. And the most prudent course is to only buy puts on stocks you still own as a form of insurance, rather than for pure speculation.
2703 points
MNSL answered 2 months ago …
I think S& P 500 index due for strong rebound together with world stock markets. .Markets is oversold now. Bottoms are near for some markets and some have reached their bottoms now.
It is wise to put money and buy stocks in Banks with strong balance sheets, with less debt particularly less exposure to subprime, property and commodity.now.
There are best-managed banks worldwide. Now depositors are withdrawing their money from some foreign banks, commodity funds, real estate funds and they are putting their money in best-managed local banks.in addition to purchasing their shares. This is a good move.
As a result of this, these banks do not need to raise funds from international markets now. They can gradually increase their lending in the long run.in the productive areas. In addition, they have reliable and large customer base and always there will be demand for their services despite up and down in the economy.
Some banks stocks will outperform markets sooner than later together with some selected sectors. May be even in the first week of October.
Particularly we must avoid some top banks exposure to different areas without much experience and knowledge and those who went away with their core businesses. These are the types of banks that going hit hard while benefiting best managed banks worldwide.
Positive factors:
Warren Buffet and some top foreign funds have already invested heavily in the financial sector
Investment in US Dollar by the largest Asian Japanese oriented fund and they are gradually increasing.
Falling commodity markets.
Right or wrong - Proposed the $700 billion bailout of U.S. financial markets
Rising US Dollar and falling oil prices
History Shows that the Market is the Real Winner at the Tail End of an Election Year
102 points
davidwilliams1000 answered one month ago …
With the collapse of the Icelandic banks,more will probably fall worldwide.All thanks to the spivs that sold on toxic loans ,and in so doing garnering outlandish bonuses.These spivs should be,by law,made to pay back these extortionate bonus payments.
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