If bank analyst Dick Bove is to be believed, the good times are about ready to get rolling again at the banks. In fact, Dicky B thinks we may be on the cusp of a new "golden age" of profitability. He contends that right now the only thing on the wrong track at the banks is loan losses. Really?! Once loan losses stabilize we are back off to the moon again. The period from 2004-2007 was truly a golden age of profitability for the banks. There was an insatiable appetite for cheap credit spurred on by virtually non-existent lending standards. Leverage ratios reached dizzying heights and it seemed like home prices would never fall. Now fast forward to 2009 and what do you find? Many households are drowning in credit card and mortgage debt, banks are being pressured into drastically reducing leverage, and "legacy" assets are still a cancer to quite a few balance sheets to name just a few of the issues out there. But have no fear, says Mr. Bove, all you need is a steep yield curve and a little bit of confidence back into the system and the rest will fall back into place. To quote the gospel according to John McEnroe, "You cannot be serious!"
Dick Bove Wishes The World Would Just Do Its Job And Submit To Goldman Sachs
Sometimes people just love banks so hard.
Dick Bové Assures Fans It'll Be But A Few Short Weeks Until They're Reunited Again
Last month, "noted bank analyst" Dick Bové informed the people that after careful consideration, he had finally selected the lucky winner of the Dick Bové Sweepstakes, tapping Rafferty Capital Markets LLC to be his new employer over a large pool of suitors banging down his door. Today, Bové's colleague/unofficial spokesman/son none of us knew about until now sent a letter to clients containing good news and bad news.