Can U.S. Bank Stocks Double Again in 2010?

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[Editor's Note: This report on the U.S. banking sector is the latest installment of our "Outlook 2010" series, which chronicles the global-investing outlook for the New Year.]

In February 2009, I reviewed the operations of the 12 largest U.S. banks, and concluded most of them were sound.

In fact, I told Money Morning readers that the soundest were at that point excellent investment opportunities.

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  1. jack pearson | November 24, 2009

    Millionsssssssssssssssssssss of middle class people have brokerage accounts where they trade stocks. A tobin transaction tax would be put on those middle class workers who try to get ahead by trading stocks outside their normal 40 hour a week job. If you want to tax Wall Street firms, tax them directly. Don't slap a tax on millionssssssssssssss of middle class Americans like myself who have a full time job & like to trade stocks on the side to try to get ahead for myself & my children.

  2. PAUL | November 24, 2009

    WE ARE A CONSTITUTIONAL REPUBLIC. WE ARE CAPITALISTIC,
    NOTHING IN EITHER SYSYTEMS SAYS THAT ONE ASSET CLASS/COMPANY/SECTOR/SHOULD BE FAVORED OVER ANOTHER. IF ALL TAXPAYERS AS INDIVIDUALS ARE SUBJECT TO SUPPLY AND DEMAND THAN ALL BUSINESS SHOULD BE TOO. IT'S A TAX ON US FOR THE BANKS(OR THEIR SHAREHOLDERS AND INSIDERS).BANKS HAVE NO MONEY. THAT IS OUR MONEY. THE BANKER'S SALARY IS PAID WITH OUR MONEY.

    NO MORE BAILOUTS. NO MORE TAXES FOR BAILOUTS.LET'EM FAIL

  3. PAUL | November 24, 2009

    BANKS HAVE NO MONEY. THAT IS OUR MONEY. THEY PAY THE INSIDERS AND SHAREHOLDERS WITH OUR MONEY. THEY TRADE WITH OUR MONEY. THE TAXPAYERS ARE NOW PAYING THOSE SALARIES OF ALL THE BANKERS, NOT JUST THEIR BANK'S .WE ARE THE NEW OWNERS OF ALL BANKS. WE DEMAND PERFORMANCE.

    NO MORE BAILOUTS.

    • Pal | March 20, 2010

      Paul, you are correct but a lot of the lemmings don't want to hear it and they invest their money in this market particularly in bank stocks at unbelievable risk. I will have no simpathy when the market crashes.

      check out the news…. the truth will evidentually be released or leaked…all major US banks are bankrupt in the real truth is known not to mention many other firms like GE wihich is 100% in debt and that is no exaggeration.

      http://www.bloomberg.com/apps/news?pid=20601087&sid=a2rzjENZQV5k

      The clock is ticking louder.

      • chand | August 9, 2010

        ALL THESE NEGATIVE THINGS ARE COMING UP BECAUSE IN THE PAST SEVERAL YEARS THE WHOLE U.S. NEVER CARED FOR ANYTHING AND NOW THEY ARE DEJECTED FOR THEIR OWN ACTION AS A WHOLE IN ALL THE FIELDS.FROM THE TIME OF WTC ATTACK IN 2001 ALL U.S. DID WAS A COMPLETE WASTE AND CARE FOR NOTHING.

  4. A. Suzuki | November 24, 2009

    You excluded one of the major factors on how the banking sector "made" money. The relaxing of accounting mark-to-market rules on all the bad loans & securities that the banks still hold.

    This situartion cannot stay static and the banks will eventually have to write off their bad loans, CDSs, MBSs, etc. and then we will really find out how "solid" the stock issues mentioned above are.

  5. Bob | November 24, 2009

    The Tobin financial transaction tax is a tax on Main Street only. Wall Street will not pay a dime. The cost of Wall Street's own transactions will be passed onto us through higher fees and lower fund yield, in addition to the cost of our own transactions. Because of severely reduced compounding, lifetime yields will be reduced by at least one third. The cost of the tax is the least expensive. Spreads on stocks will increase to $0.53, fees will increase substantially from failing brokerages, etc. Fortunately there are 120 Million Investor Class Voters ready to purge Congress if this retirement, middle class, wealth destruction tax passes.

  6. Robert | November 26, 2009

    We MIGHT see bank stocks double again… from much lower levels… for those that survive the next Primary degree wave down…

  7. Lorne, Canada | January 21, 2010

    Government intervention in the economy always makes a mess. The actual effect is always the opposite of the supposed or projected effect.

    Government spending (market manipulation) is meddling in a system that is supposed to be between private individuals. Private individuals put controls and reporting measures, and stipulations in agreements that are designed to protect the safety ot their investment. No such safety measures are possible by public agencies or political. In fact safety measures are ignored.

    One astounding example is the health care system in Canada; very expensive services and benefits are given out free of charge to the population for free. That means ther is unlimited demand for this expensive medical service. This is nothing yet said about the fact that many citizens believe the government has unlimited funds. Unfortunately that is not true.

    When the politicians now try to stop the bleeding of the public treasury in paying the cost of free public healthcare, the whining public starts and the hungry public is anxious to obtain free service. Some people go to Emergency for a sliver or a bloody nose. Simple treatments in a hospital can cost thousands of $$$$$.

    The whining public does not care; they are like babies that need to be fed. I do not doubt that they need to be fed, but do not expect your neighbor to foot the bill.

    Accountability has to prevail, for all parties. Where we find monopolies exacting high pricing for their services. could it be possible that the competitive market supply system has been muzzled?

    We have to remember that the government does not add something when it spends money. The private sector will spend what it sees as productive profitable opportunity. Productive opportunity provides for real growth.

    Government spending is the most inefficient creator of economic activity because government administration is inefficient. Governent is not knowledgable about the nuances of business operations; horrific mistakes are made when political motives drive money spending. Private business leaders best know their industry and what is happening in it. I dare say, most often if not all the time. political motives drive public spending initiatives; no positive economic upside is achieved when government funds are, "willy nilly" administered and applied to band aid fix industries.

    Highly placed politicians who disparage private business leaders tread on thin ice because the economy is a finicky cat and just as predictably, private investors pull their funding if there is doubt about safety.

  8. Mortimer Levy | November 8, 2010

    I get paid 1,000$/day for marketing advice. I'll give you some 'free'. After 5 minutes of repetitious talk, you start to sound like a snake oil salesman. Your 2,900$ fee will chase away 95% of potential clients. Why not lower your fee a little and divide it up into a monthly renewable subscription. You'll not only get many more clients, but you'll even get me! (offering you more free advice). . Your '2 week success' philosophy will have an opportunity to prove itself to some extent when clients have a 4 week period before renewal. Mortimer Levy Montreal.

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