…wish right now, wish right now…
The banks. Oy vey. They’re rolling over hard this summer, today’s bounce notwithstanding. There are disagreements as to why. Big institutional sellers are dumping for a variety of reasons.
For starters, they are awful companies, lacking in corporate governance and proven to have absolutely zero staying power when the going gets tough.
Then you have the financial regulatory reform. If you listen to Jamie Dimon, regulation is the primary reason the banks are underperforming and slow to recover. Love that guy, he’s hilarious.
Now there’s a new wrinkle – a new leg down in both housing and employment that many weren’t counting on given all that “robustness” talk from earlier in the year. This weakening of the data coming right as the Fed may be poised to take its Johnston & Murphy wingtips off the gas pedal.
And this morning something even more potentially disastrous to consider – my friend Joe picks up on some David Goldman charts showing a brand new plunge in subprime/mortgage assets that many don’t have baked into their estimate cakes.
Regardless of the reason, XLF names and the investors who love them at their supposedly “cheap” multiples are being carried out feet first this summer. And the thing to understand is that there’s nary a catalyst in sight. As Upside Trader points out this morning, there’s a slew of econ data coming our way and it’s hard to see why any of it should be “good”.
Banks could really use a wish right now.