Sometimes principles have to be thrown out with the baby's water. Whatever.
Banks. Well it is time to start looking at investing in these traffic warden realtor run government sponsored wheel greasers. The regulators (and here I include Twitter) are controlling the banks and with easy access to free money they are slowly reformatting their dinosaur systems and business processes and starting to look like equity longs.
We never recommend stocks but if we did, then there are a few banks that are looking truly undervalued. Some will perform and others will be gobbled up. Bank of America. RBS. Morgan Stanley.
The sudden interest in bank fundamentals is one of the many catalysts that are driving the equity boom. Bonds are phut and inflation and rate hikes are on their way. Whether Japan is threatened with a few nukes to put rates up to get its peanut currency up by the US car industry, or Bernanke admits he has failed in the great USD devaluation trick, the flattened yield curves are starting to twitch like a horny teenage in a nightclub. Equities are the new porn.
Banks are cheaters and they do it in numbers. Its just the way it is and it will be in the future. From the Medici bank to Goldman Sachs, they attract people who are encouraged to cheat. But if the "regulators" are overseeing the checks and balances, they guilt can be put in a drawer.
Yep, banks are the new London super prime. Up up and away.
p.s. I note the Livestrong cycles in my gym are being used again.
Citi America (marketwatch)
Morgan Stanley (nyt)
Oprah to launch series of confessional interviews starting with the CEOs of the banks.
AA to do a GAP and abandon its seagull logo.