American Banks in the new (2017) administration

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Wallace
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American Banks in the new (2017) administration

Post by Wallace »

Brian Acker was on market call (BNN) last week getting very excited about US financial institutions. His argument was that the new administration is about to release all the regulations that have been holding them back for the last 8 years, unlocking their ability to lend, and allowing them once more to increase their dividends. He became almost "manic" about it.

Certainly Trump is filling up his administration with Goldman-Sachs executives and in the last week US financials have rocketed 10-20%.

Is it time to back up the truck with US financials?
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Shakespeare
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Re: American Banks in the new (2017) administration

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His argument was that the new administration is about to release all the regulations that have been holding them back for the last 8 years, unlocking their ability to lend, and allowing them once more to increase their dividends.
OMFG. All we need in 5 years is [Financial Crisis 2]2.
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AltaRed
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Re: American Banks in the new (2017) administration

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There has been discussion to unwind some of the more onerous shackles on the banks but apparently even the banks have said they don't want to go back to the conditions that were the root of the financial crisis. It is way too early to speculate but I doubt it wil go back to the old Wild West. As with anything on the net, hyperbole is the order of the day.
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Re: American Banks in the new (2017) administration

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AltaRed wrote:There has been discussion to unwind some of the more onerous shackles on the banks but apparently even the banks have said they don't want to go back to the conditions that were the root of the financial crisis. It is way too early to speculate but I doubt it wil go back to the old Wild West. As with anything on the net, hyperbole is the order of the day.
True - some relaxation of regulation, whether good or not in the long run, will enable the banks to lend more, perhaps with more leverage (they will still be far far far less levered than they were pre-recession), and lend more at higher rates. Some of that is already priced in but those are some significant tailwinds for them. With the likelihood of a stronger economy under Trump, some of the regionals are worth doing some homework on.
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Re: American Banks in the new (2017) administration

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AnonymouslyInvesting wrote:
AltaRed wrote:There has been discussion to unwind some of the more onerous shackles on the banks but apparently even the banks have said they don't want to go back to the conditions that were the root of the financial crisis. It is way too early to speculate but I doubt it wil go back to the old Wild West. As with anything on the net, hyperbole is the order of the day.
True - some relaxation of regulation, whether good or not in the long run, will enable the banks to lend more, perhaps with more leverage (they will still be far far far less levered than they were pre-recession), and lend more at higher rates. Some of that is already priced in but those are some significant tailwinds for them. With the likelihood of a stronger economy under Trump, some of the regionals are worth doing some homework on.
I have taken a good position in BAC and a few regional banks. Trump policies will be favourable to USA financials.
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Re: American Banks in the new (2017) administration

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Bank insiders have been selling into the rally in US financials, take it for what you will.

Jamie Dimon of JP Morgan said that the bank might consider a special dividend to return excess capital instead of share buybacks at a certain price (with the strong rally in financial stock prices). Again, take it for what you will.

In hindsight, it was time to back up into financials back in January/February 2016.
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Re: American Banks in the new (2017) administration

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SkaSka wrote:Bank insiders have been selling into the rally in US financials, take it for what you will.

Jamie Dimon of JP Morgan said that the bank might consider a special dividend to return excess capital instead of share buybacks at a certain price (with the strong rally in financial stock prices). Again, take it for what you will.

In hindsight, it was time to back up into financials back in January/February 2016.
Dodd Frank bill has imposed giant compliance burden on the big banks. One commentator today said JPMorgan has 27,000 compliance officer. As a snowbird I had a bank account with Chase. In January of 2014 they gave Canadian snowbirds 30 days to close there accounts. When I asked the bank the rational he said the regularity burden for maintaining these accounts didn't make sense. If the new administration reduces tax to 15% and remove a lot of the burdens of this very costly and intrusive legislation that is a plus for the banks. Higher interest rates is another plus.
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Re: American Banks in the new (2017) administration

Post by nisser »

I think they've run ahead of themselves a bit. All the upside has already been priced it which is evident by the fact that they didn't even budge (and some even went down) with todays announcement. They've shot upwards accounting for multiple rate increases over the next years and corresponding profit increase which isn't a guarantee at all. I got rid of JPM this week but am stilling keeping wells fargo and BAC. If you want to add money to banks, may as well add to the canadian ones as they'll get the same benefits and are cheaper.
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