Karim Rahemtulla, Head Fundamental Tactician, Monument Traders Alliance This week Moody's Analytics, a well-respected rating firm, fired a warning shot about regional banks - you know, the very same banks that are up between 20% and 50% since the depths of the "banking crisis." (As a Trade of the Day reader, you should've made big bucks buying while others were selling - as I recommended you do many times!) Moody's is not predicting that banks will fail, but it did take a cautionary tone in a report released on Monday. I'm paraphrasing here to save space, but here's what it essentially said about the condition of the banks: "U.S. banks are in good shape overall; however, some regional banks will experience lower profitability because the margins between what they make on loans and what they pay out in interest are shrinking. This might get worse if we go into a recession. And some banks have exposure to commercial real estate that might go down in value." Barron's responded with this headline: "Bank Stocks Fall After Moody's States the Obvious. It's Time to Buy." So, what should you do: buy or sell? |
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