Without rehashing the whole article, there was some discussion of liquidity trapping, which is the major underlying theme of Noland's commentary. Overall, I thought there was some representation of bearish sentiment, although
no one seemed as apocalyptic as Noland (but then, very few financial commentators are and most of these guys have jobs on the Street to protect, no?)
EDIT: Also keep in mind that a common problem in investing in financial service companies and banks are that their balance sheets truly are "black boxes". It's very difficult to ferret out the quality of the paper they are holding. As a result, lots of money managers aren't aware, and don't have the time or inclination to look further. There are clues of course....such as BAC's known exposure to both SOC and EIX paper, JPM's massive derivative holdings, GE capital's recent line of credit to XRX. But as a rule, these guys don't "fess up" untill their feet are in the fire, the bank examiners are in their face, and the auditors are up their a$$ets. It's a lot like cockroaches though...if you see one or two problem loans, there usually are thousands of others that havent come to light. Then they do...all of a sudden, and the stock tanks precipitously. Look at FTU when the problems with "The Money Store" became public in the fall...or BAC with SOC. |
