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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: patron_anejo_por_favor who wrote (201404)	5/9/2009 12:30:13 AM
From: Skeeter Bug	Respond to of 306849

>>What's the earnings power of the newly deleveraged banks going forward? Leverage ratios dropped from 60 to 1 down to 20 to 1? Earnings power is 1/3, (in a booming economy). Stock price is only down 1/2. Stock is overvalued in the extreme....and economy is a long way from "booming"<NG><< patron, what is the value of a bank that... 1. won't be allowed to fail 2. can ditch all its bad assets onto the public 3. runs government i think that number is an equally rational assessment of the situation. given that i expect the cost of this bailout to destroy america as we know it, i expect the benefits to the banks to be substantial. that is now being priced into them. we also have inflation in the stock market (too much money chasing too few stocks). this is right where the government wants it - b/c it is inflation that doesn't count as inflation and it makes people confident - and this is a con game all the way. having said all that, i have a heckuva knack for buying SRS on collapse days and i sure hope Monday is big down day. ;-) fortunately, i went in smaller early so that i could add in the low low $20s and high $19s, but still... that run up in IYR was nuts - especially given that interest rates are headed higher.