Sunday, March 18, 2012

Big 6 Bank stocks upward mobility

Jon Huntsman's Big Idea

I was rereading the above article from Fall 2011. So I decided to research bank stocks to see how they are doing now. I was happily surprised that both Bank of America and Wells Fargo were doing much better than they were in the Fall when All 6 of the biggest banks in the U.S. were lowered in Credit rating all at once.

Begin quote from "john huntsman's big idea" word button above.

"Bank of America Corp. and its main subsidiaries are among the institutions whose ratings fell at least one notch Tuesday, along with Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Wells Fargo & Co. "

The low point in the fall of 2011 for Wells Fargo was around 23 dollars a share but now it is at around 34 dollars a share.  And Bank of America's low of around $4.99 a share (which was very worrying at the time) is now up to almost $10 a share now. And Citigroup's low of around $23 a share in October is now up to over $36   a share now. Goldman Sachs low of around $87   a share is now up to over $123 a share. JP morgan's low of around 28 dollars is now up to over $44 dollars a share now. And Morgan Stanley's low of around $12 a share is now up to over $19 a share.

So all are doing much better in the present business climate. But what is important to remember is that  Each one of these banks if they failed might take down the whole country economically. It likely would not be possible to bail out through any FDIC program any one of these banks or any grouping of them if the bank or banks failed. So, the country in some ways is just waiting for the next crisis  to collapse one or more of these biggest 6 banks. So, whether it takes 5 years or 50 years for one of these banks to fail, unless one or more of the other banks could purchase the failed bank it could bring down the national economy into some kind of default which is something to think about. But, given all that likely the U.S. because of its general adaptability as a nation will be the most trouble free nation on earth because of this quality during the next 50 years on earth. (At least until Europe figures out how to better organize its finances so what has happened to Greece doesn't happen in about 10 more European nations at once or one at a time.)

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