Waiting for the big Kahuna Message Board

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Strategies & Market Trends : Waiting for the big Kahuna

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To: Bonnie Bear who wrote (16780)	4/17/1998 9:03:00 PM
From: Haim R. Branisteanu	Read Replies (1) of 94695

BB, banks are the most vulnerable in a down cycle. People just forget the reserves are needed for loans which have their collateral shrinking. Those reserves go straight to the bottom line!! 2% to 3% of their assets and voala no earnings!! Lately the profits were great because no reserves were required and many banks manipulated reserves improvement to have a steady stream of earnings. From my consulting work I know quite well how the banks do it. In bad times they will even reclasify loans to questionable types who comitted various banking crimes, only if they pay regulary and the banks cheat the FDIC. That is a fact!! Just 6 years ago the reserves were sinking the banking industry!! BWDIK HAim

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