Friday, October 22, 2010

The Buzz: Is it time to buy bank stocks? - Oct. 18, 2010

the following excerpt is from end of article because after all we are talking foreclosures on this site... Banks are facing according to this article $3.7 billion in foreclosure hit. Most of that was avoidable if they would have corrected sooner. Some banks CEO's had warned them YEARS ago about what would happen if they continued down the path of sloppy paperwork and mortgage fraud.

click title link to read full article.

The Buzz: Is it time to buy bank stocks? - Oct. 18, 2010: "'The biggest risk right now is regulation and a possible moratorium on foreclosures,' said Joseph Mason, a professor of finance at Louisiana State University. 'If you have regulatory action, it will become a guessing game as to when the moratorium will end. It would be like the Gulf deepwater drilling ban for the banking industry.'

However, what's most interesting about the recent bank bloodbath is the fact that the broader market has turned a blind eye to it. The S&P 500 actually rose about 1%. Tech stocks, for example, surged Friday on the back of robust earnings from Google (GOOG, Fortune 500) even as bank stocks plunged.

So even if banks continue to get hit on more headlines about sketchy foreclosure practices, the entire market may not be doomed.

'This is not your average recovery because banks have been so flushed down the toilet. The market could hold up well if banks struggle. Earnings have been pretty good,' Ober said."

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