Richard Bove

Richard Bove
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It would have been difficult for Goldman not to do well. Goldman is more oriented to equities than debt, and stocks rose throughout the period.
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Midwestern banks are accustomed to shifts in the local economies. They plan for it. However, they do not avoid it. They get hurt. Their loan losses rise. Their earnings tumble and their stock prices are impacted. It will happen again.
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From 1965 to 1982, the yield curve in this country was inverted 47 percent of the time, yet bank earnings averaged a more rapid increase than non-bank earnings. Bank stocks also outperformed the S&P 500, on average, over that period.
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It's a significant amount of stock coming to market. But it's a pretty liquid stock and they've been buying back shares over time. We don't think the impact will be that significant over the long run.
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I wouldn't own any bank stocks in the Midwest. They're exposed to the problems of the auto industry and the Ford layoffs today are just the latest example.
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If you look at volume on the New York Stock Exchange and the Nasdaq over the last five years, there's been no real increase in the number of shares traded. In addition, proprietary trading has gone from 19 percent to 52 percent of that total. So you're seeing more competition for fewer individual trades.
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These brokerages are going to say about the quarter that just ended, 'It never happened,' because basically all of the core businesses you look at were flat or down somewhat, ... Depending on the company and the nature of its earnings base, earnings will be weak to very weak.
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People got all upset because they don't like to see people they know getting pushed out, and they don't know the new people coming in, ... But this company has been underperforming for some time. Significant change is needed.
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The problems in the credit card division are structural, and kind of long-term,
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The ability to utilize those marketing programs is going to be enormous for Bank of America. You'll see a significant increase in the bank's credit-card activity now that they have MBNA.
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Treasury prices have been rising and oil is up and down,
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But that cycle is over. The banks are going to get squeezed.
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PNC has a major home run here. I don't see a downside.
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Ninety percent of a retail bank's primary business is lending money on residential real estate, and that cycle is over.