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Bank of America isn't predicting a turnaround til mid 2009 - agree or disagree?
Answers
2222 points
readytoretire answered one year ago …
Unfortunately, I have to agree with them. The housing market is still looking for a bottom, and the economy slowing is keeping it from finding it. Although some segments of the housing market are showing signs of stabilizing, it hasn't stopped going down, just leveling off. In more saner times, that would be enough. But in todays' environment, the banks are demanding more coverage, which makes it harder for people to qualify. The result of that is the the housing market sinks some more, so the bankers think they were justified in demanding more coverage.
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3963 points
MNSL answered one year ago …
Currently consumer spending power is very weak due to fall of prices of assets, stocks and other incomes. In addition some have lost their entire retirement savings in some countries due to investment made in the property related investments. Some funds including property funds have frozen in some countries. There will be property crash in some commodity countries including Dubai sooner than later. Top property investors know the cycle of property market very well. They do not like to invest in property market now as they do not see better returns.
As a result of this recovery in some sectors such as property and commodity will take at least 05 years.
Once we see improvement in the credit market, consumer spending power increase and when confidences build in the financial sector and world economy there will be demand for physical assets in the long run. It is a slow process.
However next 12 months will be one of best period for accumulation for stocks almost all over the world. Those who invest in next rotating sectors and correct sectors will benefit most in the next 18 months and next decade. Some of current bubble sectors will underperform for the next 05 years.
251 points
MichaelShulman answered one year ago …
I think that's a very optimistic target. Here's why:
I believe the financials' renewed slide is a harbinger for the rest of the market – the financials almost always pull the market down in the short term and always pull the market down over the long haul. Reality is sinking in about continuing problems on bank balance sheets and their longer-term inability to generate profits due to a reduced business profile and the effects of the recession.
The Treasury and Fed Chairman Ben Bernanke are beginning to get a bit desperate as all their half-measures are being revealed to be just that, half-measures. The American banking system is technically insolvent and it's illiquid. It will take $1.5 trillion to $2 trillion dollars to fix it and would, for political reasons, require the nationalization of every major bank.
Now, that's the sector at a glance, but in terms of BAC specifically, more on Wall Street are wondering if Ken Lewis can pull off absorbing Countrywide Financial and its bad debts.
We'll have to see, but my forecast is that the mess in the banks will have been cleaned up by 2010.
