While the big banks may have the attention of the Street right now, it's the smaller regional and community banks that are among the best stocks to buy now.
These small bank growth stocks are starting to show dazzling growth as their balance sheets improve dramatically. And they are still very early in the recovery cycle, so there is still plenty of time for individual investors to catch this train...
If A New Glass-Steagall Act Can Protect Us, Why Is There Opposition?
There has been a huge outpouring of support for Senators John McCain and Elizabeth Warren's idea to reinstate some form of the Glass-Steagall Act, which drew a clear separation between investment banking and commercial banking.
The enthusiasm has managed to vault a wall that many thought impossible: broad bipartisan support.
In fact, from McCain and Warren on down to the right and left, strange bedfellows are signing on.
Whether it's the various Tea Party groups, or MoveOn.Org. Whether it's the Huffington Post or Breitbart, or Bill Clinton, there is plenty of common ground between all of these divergent groups.
Even in Congress itself, there is significant bipartisan support for at least the idea behind Glass-Steagall - that big banks should be broken up, and that those who remain should be absolutely prohibited from, frankly, gambling with our money.
It's perfectly clear that, among the people of this country, there is a real desire to bring banks to heel.
Professor William K. Black, veteran warrior of the Savings & Loan Crisis, put it well when he said that "it violates the core principles of conservatism and libertarianism to extend the federal subsidy (to)... commercial banks via deposit insurance to allow that subsidy to extend to non-banking operations," meaning that we, the taxpayers, shouldn't be forced to subsidize a bank's gambling habit.
After 14 Years of Free-for-All, Glass-Steagall Is Back
Three cheers for Elizabeth Warren!
Yesterday she launched a wire-guided Scud missile at the too-big-to-fail banks.
The freshman senator from Massachusetts, formerly a Harvard Law School professor specializing in bankruptcy law, introduced her "21st Century Glass-Steagall Act" co-sponsored with Sens. John McCain (R-Ariz.), Maria Cantwell (D-Wash.), and Angus King (I-Maine).
And it's got the Big Banks shaking in their boots.
The 21st Century Act would separate institutions with savings and checking accounts, in other words FDIC-insured depository commercial banks, from investment and trading "banks" engaged in capital markets activities, most of which are on the border between speculation and manipulation.
The Big Banks On Trial, Again
You want to know why the entire global financial system almost collapsed in 2008?
There seems to be a simple answer. Not encouraging, but simple: The European Commission is exploring the possibility that there was a conspiracy among 13 of the world's major banks that colluded to keep the entire house of cards a secret.
In a press release Monday the European Commission announced it sent a "statement of objections" to Bank of America Merrill Lynch (BAC), Barclays (BARC), Bear Stearns , BNP Paribas (BNP), Citigroup (C), Credit Suisse (CS), Deutsche Bank (DB), Goldman Sachs (GS), HSBC (HBC), JP Morgan (JPM), Morgan Stanley (MS), Royal Bank of Scotland (RBS), UBS (UBS) as well as the International Swaps and Derivatives Association (ISDA) and data service provider Markit.
This statement of objections is a formal step in EU investigations that charges the banks, the dealers' association, and the swaps pricing agent and index controller of "colluding to prevent exchanges from entering the credit derivatives business between 2006 and 2009."
The companies are then expected to answer the charges.
"If, after the parties have exercised their rights of defence, the Commission concludes that there is sufficient evidence of an infringement, it can issue a decision prohibiting the conduct and impose a fine of up to 10% of a company's annual worldwide turnover."
Part of the antitrust behavior of the accused, besides controlling pricing of derivatives to their exclusive benefit, would likely address their complicity in veiling the entire market to deflect fears of counterparty exposure, concentration of risks and leverage in the financial system.
Behind the Veil: Where the Elite Meet
It's Enough to Make Your Blood Boil
Here are two items that will upset you...
First, back in February, Attorney General Eric Holder christened the unofficial official doctrine of "Too Big to Jail."
He told Congress, "The size of some of these institutions [TBTF banks] becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute - if we do bring a criminal charge - it will have a negative impact on the national economy, perhaps even the world economy."
Of course, it was only the christening of another neat little name.
Check Out Who's Hiding $32 Trillion in Offshore Accounts
More than two million emails that shed light on the biggest tax dodge in history - trillions of dollars hidden in offshore accounts - have been uncovered by the British newspaper The Guardian and the Washington, D.C.-based International Consortium of Investigative Journalists (ICIJ).
Some $32 trillion has been hidden in small island banking hubs which host a bevy of trust funds, shell corporations and other tax havens, the Tax Justice Network estimates.
This money is to the financial world what the Higgs boson and dark matter are to particle physics: It's tough to prove it's there, but the universe doesn't make much sense without it. It's just a matter of connecting the money to the people hiding it.
That's been a tall order... until now.
A Simple, Scary Way to Neuter Goldman Sachs and Friends
TBTF is the acronym for "too big to fail."
It's the crazy notion that certain banks are so large and systematically important (which really means so threatening to financial systems) that they must be kept alive by the government, because their failure would wreak havoc on the economy.
How will they be saved from their own greed? And how will we be saved from their greed so we can kneel at their altars another day?
Central banks and governments, who are not as powerful as central banks, will backstop them with printed paper and taxpayer blood. That's how they'll be saved, grow bigger, and one day rule the world.
Oh, that already happened... never mind
There is No Such Thing as a "Safe" Big Bank
Thank goodness we have the FDIC and the Federal Reserve and Congressmen and women.
Thank goodness they're willing to tap the captive citizenry for as much cash as they need to back the Fed and the FDIC to safeguard our big, beautiful banks from... themselves.
Only, there's a problem.
Big bank "safety" is only a myth.
The Next Bank Meltdown Won't Be an "Accident"
Big banks turned in a pretty stellar first quarter. All but one beat profits expectations. But as I told you last week, I'm now out of these stocks completely.
Do you want the truth about what shape banks are in right now? Sure you can handle it?
I'm sorry; I can't tell you the truth.
Regulators can't tell you the truth.
And the Federal Reserve won't tell you the truth.
No one can tell you the truth. That's because banks don't tell the truth. And neither does the Federal Reserve.
Why It's Time to Sell Too-Big-to-Fail Banks
I'm not buying any bank stocks here. I don't own any at present. And if I did, I'd either sell them or at least hedge them.
It's not that they're doing poorly. They're not. Bank stocks have been strong because they've been making record profits. It's been a good ride if you're a Too Big To Fail bank or a shareholder.
But, being the cautious trader I am, I'm inclined to take profits when I have them in hand. That's why I'm out of the banks. I've banked my gains and turned cautious.
Citigroup beat analysts' expectations and finished up yesterday-even though the Dow took a big tumble.
Wells Fargo and JPMorgan Chase didn't do badly last week, in terms of their earnings and profit numbers either, but investors were disappointed.
But here's why I'm cautious...