I'm tired of the hyper-volatility in the financial stocks and want the Fed to go ahead and start the tapering process that analysts keep agonizing over. We all know it's coming, and it won't be pretty, but it will get us back to fiscal reality. Time to get it over with. Let's get back to basics in this sector.
Me, I still am figuring late January or February. Untik then we see some funky swings. We learn a lot tomorrow with non[farm payroll numbers. Also, we need to keep an eye out for and extension for unemployment benefits. They don't extend, those receiving that won't, and stop looking for employment, will no longer be considered part of the "unemployed" workers, thus quickening the drop to the magical 6.5% number.
The known is it will happen, the unkown is when. I can see a flat year end price to mildly lower here by 12/31. $9.35 - $9.50 still my guesstimate, but the resident mba says numbers mean nothing, unless it's the BV, but then figure exclude goodwill, the book is fairly priced. Now, rates go up, financials will see earnings increase in time, so there is your silver lining.
tapering is not tightening. The FED still needs mom and pop to purchase homes so my guess is rates will go no out of control without intervention, the whole global economy will take a hit if they tighten and taper....stick to Regions and dont worry about the taper.
Here we go again. From one day to the next, up more than 1%, down more than 1%, up more than 1%. On no real news, no change in what investors know about the bank finances, all on speculation about when the Fed will begin to wean the markets off of the flow of stimulus money. I'm just too old for this crappola, no way to figure out if or when to invest, or even in what sector, let alone which companies.
Certainly, I agree, that tapering is coming, but the Fed made some comments after they delayed tapering that the markets pushed interest rates too far too fast ... saying that it was an over reaction. And then added that the Fed can start tapering, stop tapering or even reverse it ... essentially telling the market not to over react by driving long term rates up too fast, or you'll invite the Fed back to the fight. There is a chance that as the economy improves that the Fed can do this orderly ... or keep order.
Tapering is obviously different than the ending of QE1 or QE2 which were designed to suddenly stop with no tapering. The Fed learned, and they also indicated that the market shouldn't react as if tapering is going to be like the sudden stopping of QE1 and QE2.
I wish I could share your optimism and faith in the ability of the Fed to fine-tune the economy and tell the markets how they SHOULD react. The Fed is converting debt to cast at a rate of $85 billion per month, and any reduction in that process is going to cause major increases in the artificially low interest rates we've enjoyed for two years. The economic recovery is fragile in the extreme, with many businesses still unwilling to hire full time employees. The uncertainty of the effect of turning off the money flow, no matter how slowly, is currently a major barrier to full recovery. I don't believe that the Fed can bring about a soft landing.