Even though the government stress tests have ended and the banks in question have set about raising the required capital, credit rating agency Standard & Poor’s believes the nation’s banking crisis has “merely entered a new phase” and might not end before 2013.
In an odd bit of capitalist irony, the U.S. banking crisis could end up as the catalyst that finally jump-starts the long-moribund market for initial public stock offerings (IPOs). In fact, it already appears to be happening.
One business day removed from the government’s bank stress tests, four of the largest U.S. banks – BB&T Corp. (NYSE: BBT), Capital One Financial Corp. (NYSE: COF), U.S. Bancorp (NYSE: USB) and KeyCorp (NYSE: KEY) – announced plans to raise capital through stock offerings.
The results of the government’s bank stress tests were released yesterday (Thursday), and the U.S. Federal Reserve has directed 10 banks to raise an aggregate $70 billion-plus in capital.
Investors need a solid defense right now, says Martin Denholm. This means holding high-dividend stocks. Consumer staples and telecoms industries are the best places to cherry pick strong companies. For a lower-risk alternative, try these two high-dividend ETFs (AMEX:SDY, PEY).
U.S. stocks yesterday (Monday) staged their biggest rally since the Great Depression – with the Dow Jones Industrial Average soaring an all-time record 936 points – on a Federal Reserve-led push to flood the ailing global financial system with dollars and on a U.S. government plan to buy stakes in banks.
What They’re Saying About The Financial Sector Sounds Nice… As I was running to catch my early morning flight on Saturday, I grabbed a copy of the New York Times and Barron’s. I looked at the Barron’s cover and figured that I must not have gotten enough sleep and was still in dreamland.
The last time I recommended a bank to anybody was last August. And it was a Canadian Bank – Bank of Nova Scotia (BNS). Once upon a time – not that long ago – banks were solid, safe investments that generated a steady stream of income through the dividends they issued.
Fifth Third Bancorp (FITB) is eying larger rival National City Corp. (NCC), the ninth-largest U.S. bank with approximately $150 billion in assets, as a potential acquisition target, according to several media reports.