Shares of Aflac (AFL) are down over 30% today after an analyst warned of certain securities in its portfolio that are exposed to the rapidly disappearing UK banking system. The company says it believes its capital position is adequate, but the analyst believes that if the company takes even a small hit on holdings related to Barclays, HBOS and RBS, it could result in serious damage to its balance sheet.
Here’s why investing in any financial firm has been so scary: you can’t feel good that any one company has a healthy balance sheet. The best play so far has been to find the firm that’s assumed to be immune and then bet against against them. State Street (STT), which got crushed on Tuesday, was another good, recent example.
Is it any wonder that so many people missed the subprime crisis? We continue to get hit from blindspots, well after we’re supposed to be extra vigilant about this stuff
And is there any financial company that you flat out feel confident that they’re not exposed to the crisis?
The Market Was Spot On With State Street