Today, Treasury Secretary Timothy Geithner unveiled his $2 trillion rescue program and the Senate passed a $838 billion bailout bill. All this was a big flop on Wall Street and the DJI was off 382 points, or 4.6%, to close at 7,889.
Apparently, bank shareholders don’t want to be rescued Geithner’s way. A look at the megabanks showed Bank of America (BAC) down 19.3%, to 5.56, JP Morgan Chase down 9.8% to 24.62 and Citigroup (C) was down 15.2% to 3.35.
Regional banks were hit even worse. Regions Financial (RF) was down 30.2% to 3.24, SunTrust was down 27.2% to 9.06, Fifth Third (FITB) was down 24.2% to 2.19 and Zions was down 19.5% to 11.95.
Of the 25 bank stocks I track, none were up and 20 were down over 10%. Want a “good” bank stock? Here is one: People’s United Financial (PBCT). Apparently this bank has avoided the mistakes of the large banks. There are undoubtedly other good ones out there, we just don’t hear much about them.
This imploding of our banking system seems unstoppable. Since almost all of us have accounts at these banks it is a cause for grave concern. Are our deposits at risk? The FDIC says no. Hopefully the FDIC is right.
The general rational given by commentators for today’s decline was that Geithner was too vague and his plan lacks specifics. What we need is a clear course of action as to how we are going to deal with the toxic assets on bank balance sheets. Until the US government and banks are courageous enough to face up to the losses, we will be stuck in this downward spiral.
Apparently, bank shareholders don’t want to be rescued Geithner’s way. A look at the megabanks showed Bank of America (BAC) down 19.3%, to 5.56, JP Morgan Chase down 9.8% to 24.62 and Citigroup (C) was down 15.2% to 3.35.
Regional banks were hit even worse. Regions Financial (RF) was down 30.2% to 3.24, SunTrust was down 27.2% to 9.06, Fifth Third (FITB) was down 24.2% to 2.19 and Zions was down 19.5% to 11.95.
Of the 25 bank stocks I track, none were up and 20 were down over 10%. Want a “good” bank stock? Here is one: People’s United Financial (PBCT). Apparently this bank has avoided the mistakes of the large banks. There are undoubtedly other good ones out there, we just don’t hear much about them.
This imploding of our banking system seems unstoppable. Since almost all of us have accounts at these banks it is a cause for grave concern. Are our deposits at risk? The FDIC says no. Hopefully the FDIC is right.
The general rational given by commentators for today’s decline was that Geithner was too vague and his plan lacks specifics. What we need is a clear course of action as to how we are going to deal with the toxic assets on bank balance sheets. Until the US government and banks are courageous enough to face up to the losses, we will be stuck in this downward spiral.
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