Photo: paul goyette, Flickr
It’s kind of obvious, but the fierce selling across all banks — especially since THE DOWNGRADE — is really quite worrisome.We keep hearing about how well capitalised and how liquid the US banking sector is. And there isn’t a housing bubble bursting right now (although bank assets have no doubt been taking hits). But the intensity of the selling, and the fear (perhaps) that the crisis in Europe could jump the wire and come here via banks is not something that can be taken lightly.
The politics, too, is horrible for banks. There’s no support in the US for doing anything to bolster the banks, at least not in Congress.
Meanwhile, the recent parade of bank CEOs into the media (Dimon, Moynihan, the SocGen guy) hasn’t done anything to ease confidence.
As earnings season has been showing the US economy is not that bad. Cisco (!) just beat on earnings. News Corp. did too. The jobs picture hasn’t collapsed by any real measure.
Anyway, tonight there are reports of Bank of America dumping its stake in China Construction Bank to raise capital, and the stock is ticking up after hours. Seen this before.