The average reserves at JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, Goldman Sachs and Morgan Stanley have fallen from $1.60 to 90 cents for every dollar of commercial real estate debt on which a borrower is at least 30 days late, according to filings to the Federal Deposit Insurance Corporation.
US banks now hold $1.40 in reserves for every dollar of delinquent commercial real estate loans, down from $2.20 a year ago, according to the FDIC data, and the lowest cover banks have had to absorb potential commercial real estate loan losses in more than seven years.
Bank of America stock reached a year long low last October, but has climbed back fairly well since then. At the moment, they don't necessarily look like a strong buy or sell to me. Thinking about...
Bank of America stock reached a year long low last October, but has climbed back fairly well since then. At the moment, they don't necessarily look like a strong buy or sell to me. Thinking about the future, though, it definitely seems there is more downward pressure on price without government intervention. However, everybody knows if the economy starts going down the government is going to step in to keep the banks going, though, so will banks like these ever be valued fairly on their own merits when the economy is stressed?
What's a good strategy for protecting (or growing) one's capital with this knowledge?
Seems like just sitting in cash, waiting for a specific bank opportunity to buy the dip, or using a bit to buy some puts. Or buy some VIX calls.
Useful data from the article:
Bank of America stock reached a year long low last October, but has climbed back fairly well since then. At the moment, they don't necessarily look like a strong buy or sell to me. Thinking about the future, though, it definitely seems there is more downward pressure on price without government intervention. However, everybody knows if the economy starts going down the government is going to step in to keep the banks going, though, so will banks like these ever be valued fairly on their own merits when the economy is stressed?
What's a good strategy for protecting (or growing) one's capital with this knowledge?
Seems like just sitting in cash, waiting for a specific bank opportunity to buy the dip, or using a bit to buy some puts. Or buy some VIX calls.
Just keep buying and holding those index funds.
Mirror, for those hit by the paywall:
https://archive.is/VbOBj