Time for me to stop fighting the Fed and its delays on raising interest rates, and sell Capital One
There’s really nothing wrong with the shares of Capital One Financial (COF) that a stronger U.S. economy, a more confident U.S.consumer, and an interest rate increase–or two–from the Federal Reserve wouldn’t fix. It’s just that I...
Buy Capital One
Financial stocks tend to do well as interest rates rise. What you’re looking for in this environment is a bank stock that is likely to show an increasing net interest margin. Like Capital One Financial (COF). In the third quarter net interest margin rose to 6.73%, up...Left to fight alone, the European Central Bank doubles its ammo
The euro debt crisis takes another bite at Spain and expands to Belgium. But German opposition to a bigger bailout fund has left the European Central Bank to fight the problem alone. So, prudently, the European Central Bank has decided to raise more capital. Today,...The mortgage foreclosure "robo signers" could cost banks big money–because of put backs
Add another word to English as spoken on Wall Street: robo signer. These are the folks at banks and mortgage servicing companies who signed hundreds of foreclosure documents a day. Frequently they didn’t read them at all. Even more frequently they didn’t bother to...Just what Citigroup doesn't need–more questions about its capital
Exactly how well capitalized is Citigroup (C)? That’s a question that the Financial Times raised on September 7. The answer, the paper reported, depends on not so much on who’s counting the beans, but on who’s deciding what beans count. At issue is something...China is creating bank capital out of thin air–and that's not good
You’ve got to give China’s most recent effort to increase the capital of China’s largest banks big points for chutzpah. That’s not exactly an endorsement for these banks as investments, however. Or of the soundness of China’s troubled banking system. On August 24...Today's best guess is that Euro banks will need $55 to $125 billion in new capital after stress test
Every analyst on—and many off (including yours truly)—Wall Street is trying to put numbers to the results of the Euro Zone’s bank stress test. In recent days we’ve moved from opinions on which country’s banks will be hit hardest (See my post of yesterday, July 8,...The next rally won't be like the last one–here's how to make sure you find the next leaders
If the bull market that ended in 2000 the bear market that began in 2000, the bull market that began in 2003, the bear market that began in 2007, and the possible bull market that began in 2009 and that may or may not have ended in 2010 teach investors anything, it’s...Think China's bear market is a buying opportunity? Here's one way to tell when to get in
Have I got a China indicator for you. Like a lot of investors I think the selloff in Chinese stocks marks a buying opportunity—sometime in 2010. The Shanghai Composite Index is down 22% in 2010 and the market is deep into bear market territory. But that doesn’t mean...Want to tag along as the smart money buys bank shares? Here are three stocks stocks that fit the strategy
The “smart” money is buying U.S. bank stocks. William Ackerman, who runs hedge fund Pershing Square Capital Management, recently bought 150 million shares of Citigroup (C). John Paulson, the manager of hedge fund Paulson & Co., added 11% to his already huge...Cheap money is the root of all financial bubbles–and it's still at work now
If you’d like to see somebody—lots of somebodies, if I had my wish–go to jail for their role in creating the lob al financial crisis, then $8 million looks cheap. That’s the budget for the Financial Crisis Investigation Commission. If, just for starters, some of...With others cutting back on capital spending, ExxonMobil plans to spend more
ExxonMobil (XOM) goes its own way. Again. When oil prices were soaring in 2006 and 2007, ExxonMobil refused to get sucked into a race to see who could spend more on exploration. Now that everyone else is cutting back on capital budgets (and some companies such as...The one must-have number for successful long-term investing
How do you decide what to buy? I get the question a lot and I think it’s a good one. The answer depends on things like how long I’m planning to hold the stock, whether I see it as a value or a growth play, and where the momentum is in the market. If I’m looking for a...China's banks need to raise $90 billion in capital through 2011
That’s a bit of a headwind. This week China’s big state-controlled banks announced plans to raise $11 billion through stock and bond sales to meet new capital requirements set by the country’s bank regulators. For example, Bank of China (BACHY.PK) has announced plans...Buy Telkom Indonesia (TLK)
Telkom Indonesia (TLK), or Telekomunikasi Indonesia, is a complicated machine with all the parts, I think, moving together in the right direction. Let me explain. First, there’s the growth in Indonesia’s economy, which is forecast to show a 5.2% increase in GDP in...Honey, we bankrupted the kids!
Worried that the global financial crisis combined with the Great Recession in the United States has bankrupted not just ourselves but our kids and their kids? Good. You should be worried. Maybe then we’ll do something about the problem before it’s too late. First,...Looking for countries that have their financial acts together? Look to emerging markets like Peru and Indonesia
As far as I know, there’s no financial-markets law saying that if some countries get a credit-rating downgrade, then others must get a credit-rating upgrade to keep the system in balance. But right now it seems to be working that way. The past year has brought...Everyone agrees that the dollar will keep falling; the dispute is over how long
Unemployment. Consumer spending. New home sales. End of the year profit-taking. End of the year portfolio window dressing. All those drive the stock market day to day. But none pack the wallop that the rising and falling (mostly falling recently) price of the U.S....Capitalism could still get a stem to stern overhaul. To keep score in the Revolution track something economists call "externalities."
“A crisis is a terrible thing to waste,” said Stanford economist Paul Romer way back in 2007 near the start of the recent (or should that be “current”?) global fiscal and economic crisis. You certainly understand why if you take a look at U.S. economic history. Most...Banks are going to have to raise a lot more capital, says HSBC CEO
HSBC (HBC) CEO MichaelGeoghegan told the Financial Times that he expects international regulators will eventually require banks to have Tier One capital ratios of about 10%. That’s significantly higher than the 8% target now going the rounds in conversations...Where's the money? Despite the Fed, the money supply is falling
We’ve got a little problem in the economy. Tiny really. Nothing to worry about. Just that money supply is falling and that could endanger the entire economic recovery. The Federal government and the Federal Reserve are pumping money into the economy as fast as they...Jim’s Daily Email Alerts:
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