Kevin Ndlovu
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Goldman Sachs ups six financials
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I was doing some reading and I came across the article LONDON (MarketWatch) -- Goldman Sachs said it's selectively upgraded financials, notably brokers and asset managers, but is remaining cautious on regional banks, mortgage and specialty finance and REITs. "We have reached an inflection for stocks with little credit exposure, or where exposure is marked to market," the broker said. "We expect the problem to shift from brokers to regional banks and specialty finance." American Express.. | ||
Comments (2)
Notice there were only a few companies that they upgraded and more that they downgraded or left the same. I believe this is a sign GS believes the financials are due for a pullback during earnings.
Good luck,
Uncle John
Posted by Uncle John | April 9, 2008 3:12 PM
Kevin ( whose name means 'Handsome' in Irish ),
The BAD news is out on Financials, but the earnings Season will "Paint" the rumours with the Numbers - & it will take a lot of RED INK. This could lead to the "Other Shoe" being dropped.
Many financials have sold Capital and/ or preferred stock at distressed prices to "PROP UP " their balance sheete to meet Capital Ratio requirements or to remain solvent. This means that the "Float" has increased dramatically and that the shareholders have been "DILUTED". Preferred stock ( convertible and otherwise ) means that dividends must be paid off the top - meaning less earnings per share for the common shareholders, as well.
I have seen a lot of cartoons featuring an impressive facade with Doric or Corinthian Columns in front of a bank -- and behind that an Out-House SHACK. Ther's been a lot of Face-Saving "facading" going on. Putting on a happy FACE and putting the LipStick 0n PIGS, too.
It's going to take some time to clear up this mess. The Banker's Motto is " A problem DEFERRED is a problem SOLVED". There is nothing DUMBer than a Banker, I assure you.
The day of reckoning is not far off. You cannot "paper" over systemic secular problems forver - they are now just showing through the " Thin Veneer" of WALL[street]PAPER.
Too Big to Fail or Too Big to BAIL ????
Don L. Ferk ( fka - VikingWarrior )
PS : I like Leasing outfits like GATX ( GMT : NYSE ) - they "Loan" out capital equipment like Railraod cars and locomotives. Such assets do not "Evaporate" into thin air like Money does. Take a look at AirPlane leasors and Shipping Companies that lease out ( Charter ) for long time periods - they have locked in revenue streams and most pay nice dividends.
Better to rent out stuff that you can get back than CASH which you can't get back. Bankruptcy means that the Court sets aside and abrogates debt. That doesn't happen with equipment "loans"
" Bankers' Neices SEEK perfection , EXPECTING all the gifts that Wise Men Bring " - Bob Dylan
Lyrics from the
Song O' da Day :
Love Minus Zero / No Limit --- Bob Dylan
http://youtube.com/watch?v=mKoV1yJnqAI
http://youtube.com/watch?v=mKoV1yJnqAI
Posted by don ferk | April 10, 2008 11:38 AM