Tags: bove | banks | are | fine

Bove: U.S. Banks Are Just Fine

By    |   Thursday, 23 Apr 2009 02:18 PM

U.S. banks are healthy and make a good investment, says analyst Richard Bove.

A recent report, widely circulated on the Web, claimed most banks failed a government stress test and are insolvent. Merely rumor, Bove says.

The first of the stress test results are due out Friday.

“No one, it appears, has any faith in any American bank,” says Bove, the vice president of equity research at Rochdale Securities.

“The recent rise in the prices of these stocks was easily reversed … by a false story arguing that a copy of the stress test results had been leaked.”

While the report was not denied by Treasury, the market was spooked and bank stocks took a hit.

What happens when the real results are out remains to be seen, Bove says.

“The market will devour the banks if it reads these reports negatively. It is likely to destroy any banks viewed as wanting in capital strength. It will reject any argument that the banks are healthy. The Treasury has created this monster and it better handle it carefully.”

Bove warned that more mistakes like this faked leak could result in banks being nationalized, “bankrupting the finances of the United States government, and sending the economy into a multiyear Depression. If you believe this is an overstatement look carefully at the movement of bank stock prices today on a false rumor.”

Bank of America CEO Ken Lewis told the Nightly Business Report that there is no merit to the report about banks being insolvent.

“In fact, the stress test actually calls for the banks to take much larger losses because unemployment rates rise more than any of the blue chip consensus would say would happen,” he said.”

Lewis said banks are still “relatively healthy.”

“But in the main, nobody has to worry about the financial institutions in this country.”

© 2017 Newsmax. All rights reserved.

 
1Like our page
2Share
StreetTalk
U.S. banks are healthy and make a good investment, says analyst Richard Bove.A recent report, widely circulated on the Web, claimed most banks failed a government stress test and are insolvent. Merely rumor, Bove says.The first of the stress test results are due out...
bove,banks,are,fine
307
2009-18-23
Thursday, 23 Apr 2009 02:18 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved