Why Banks will continue to get Healthier!

1. The regional banks may still have a lot of sweating to do, but do you really think they will be made to suffer? This is the bailout nation where everyone is a winner!   Especially the banks! 

 Here is why banks will continue to get healthier, but as always do your own analysis:

Real Estate: The home builders stocks have rallied significantly (XHB) and what's good for real estate is good for the banks. As Real Estate continues to stabilize and foreclosures become less and less a problem the banks become more and more attractive.   

Consumer: There has been a lot talk about the consumer lately, and yes the consumer is beaten down a bit, but still consuming none the less. Instead of charging things on their credit cards and being in denial about it, they are going out to eat to discuss their finances and charging the meal on their credit card.

Yield curve: The banks still have a great interest rate spread, and 'Big Ben' Bernanke is not going to be raising rates anytime in the near future.

Government Back Stop: If the government was going let these banks fail they would have done it already, and they are obviously not. There is a lot of more room for growth now, and the economy is improving significantly. 

Sure there may be a double dip recession, and there are a lot of bears that are denial about the fact

there will be a recovery and growth in the 3rd and 4th quarter of 2009.   They have locked themselves into a pattern where all they see are bad things happening. 

About the Author:

Bob Obrien Senior Instructor MyWealth

One Response

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