David Faber & Art Cashin On Regional Banks, TARP And Stress Tests
Faber on Citigroup, Bank of America and the regional banks (3:44).
From CNBC:
Citigroup is holding its annual shareholder meeting Tuesday. Will dissident investors shake up the company's ranks? CNBC's David Faber reported on the state of financials, as CitiCEO Vikram pandit says he "intends to see this thing through."
Faber notes that a J.P. Morgan analyst is "staying negative" on Bank of America. The analyst believes that BofA should "follow Citi" and announce an equity-for-preferred swap.
Faber says the nature of the rally is "a very interesting" indicator. As of April 17, it was led by "incredibly low priced" stocks: shares under $5 gained some 259 percent; shares over $30 rose a mere 75 percent.
Regional banks are "starting to scare people, to a degree," Faber said, as observers wait to hear about possible loan losses and credit-quality issues. In particular, KeyCorpis "getting hit," Faber said.
Cashin on TARP, the bank stress tests, and the new realities of working on Wall Street (3:42).
From CNBC:
Art Cashin, UBS Financial Services director of floor operations, offered CNBC his take on traders and the market Tuesday.
On the one hand, the drastic pullback expected by many has not yet materialized. He explained that the market can be primed for the big drop, then bypass it safely, if the conditions and context just aren't there.
"Yell fire in a dark theater and everyone panics. But yell fire in an open meadow and the birds stop singing for 11 seconds," Cashin said.
But he expects more pressure on financials, as the original concept of the TARP is "morphing rapidly to things I never dreamed I'd see."
He pointed to the inclusion of policies including executive pay caps, the ousting of General Motors' then-CEO Rick Wagoner and the conversion of government-controlled bank shares from preferred to common "somewhat bewildering."
"We're making Sweden look like the Wild West," Cashin warned.
Two short clips after the jump.
Apr 21, 2009 at 3:22 PM
Reader Comments (1)
http://www.cnbc.com/id/15840232?video=1099555845&play=1
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