Salient to Investors: Robert Baltzer at Baillie Gifford said corporate bonds will make less in 2013 after 4 years of annualized gains of at least 15 percent. Baltzer has become more nervous while the market has become less nervous, and has reduced banking securities because he sees significant systemic risk in European banks. Since the collapse of
READ MORE... →Salient to Investors: Mayra Rodriguez Valladares at MRV Associates said being big and global isn’t what it used to be, and sees global banks jettisoning divisions abroad and at home. UBS, Citigroup and RBS are reversing decades of global expansion. Charles Dallara at the Institute of International Finance said globalization of financial markets said reversing decades of going
READ MORE... →Salient to Investors: Simon Johnson at MIT Sloan School of Mgmt writes: William Dudley at FRB New York made it clear that 1) too big to fail remains with us. 2) The completed first round of living wills – potential liquidation plans by major financial institutions – has been unsatisfactory and 3) The legal mechanisms for an FDIC-managed
READ MORE... →Salient to Investors: Scottish money managers, including Aberdeen Asset Mgmt and Scottish Widows Investment Partnership, are investing in US regional banks. James Kinghorn at Scottish Widows Investment said regional banks are more leveraged to benefit from an improving economy than the larger banks, better relative to European banks, and attractively valued. Kinghorn said the US economy
READ MORE... →Salient to Investors: The New York Fed says investors are beginning to price in a higher risk of default on senior bonds issued by large institutions. Since the mid-1990s, banks have grown too big due primarily to non-deposit liabilities, not retail deposits. The five biggest US banks control more than half of all US banking
READ MORE... →Salient to Investors: Bloomberg survey of analysts shows they are most bullish on stocks farthest from their highs – banks. Financial institutions remain 58 percent below the record of February 2007 while analysts raised estimates for profit growth to 21 percent for Q3 and 32 percent for Q4 on signs of a housing recovery. Revenue
READ MORE... →Salient to Investors: Bruce McCain at KeyCorp said we’re back to a period where investors become less enthusiastic as they realize the problems of the world have not gone away. Bloomberg poll estimates S&P 500 earnings will fall 1.7 percent in Q3, the first decline since 2009. Gina Martin Adams at Wells Fargo said earnings are weakening fairly quickly –
READ MORE... →Salient to Investors: To play the gains in housing, invest in undervalued regional banks that have a strong presence in growing regions of the US. Almost all regional bank stocks are undervalued, compared to fundamentals. Read the full article at http://seekingalpha.com/article/888331-watching-certain-banking-stocks-by-housing-trends?source=intbrokers_regular
READ MORE... →Salient to Investors: Kenneth Heebner said the U.S. is poised to outperform most countries – lower growth in Asia and Europe will lower oil and commodity prices, a de facto tax cut for U.S. consumers. Heebner sees forces driving the U.S. in a positive direction – the real estate bust has created pent-up demand for housing
READ MORE... →Salient to Investors: Michael Price at MFP Investors said five of the six biggest U.S. banks are selling at or below tangible book value, meaning the pieces are worth more than the whole, including some wonderful assets. Bank of America has traded below book value since 2009, Citigroup since 2010. Ken Fisher at Fisher Investments, underweight bank stocks
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