Now, a lot of stocks got hammered. Why? Because the institutional equity investors (the smart money) knew this was coming, and as soon as it happened, they bailed, took their profits and vanished. But they'll be back, as they also knew the fed was coming to save the day. So they will buy back in at much lower prices, after all the damage is done and ride it again...and again...and again. Case in point...look at the investment BofA made today. Coincidence..I think not. The market is smarter than you and MUCH smarter than BB&T.
Ironically, this sad, but nevertheless real phenom makes for a strange twist of things. BB&T is not in the business of gaming the fed, gaming the credit markets, etc. They are supposedly the conservative, traditional bank, but if you invest in the bank for the long term, you get nothing. Ironically, the only way you make money in this stock is to trade it. This is so counterintuitive, yet it is the fact. How can it be? You shoudd KNOW that you have to trade in and out of the other banks' stocks, but not BB&T!!! Nooo...this is a "buy it and forget abou ti, because managment is sooo GOOD and you'll hold it for years and make a fortune. Right? Wrong...If you followed that strategy for the past 10 years you got skunked. Sadly, this demonstrates that there is no market support for the business model.
Have you stopped to think why we have the fed and the FDIC? They exist to give bankers an out. They allow the bankers to make risky decisions that perhaps they would not otherwise make, and as long as these government sponsored safety nets are out there, the bankers will always make those decisions, and profit by them, and then when the one day in a thousand arrives and it crumbles, the fed safety net kicks in...no harm...no foul...and in a few months they are all back in business. BB&T will always be a day late and a dollar short. They need to get in the game...they just can't keep doing the same thing over and over again....it is a failed model. Lastly, this entire phenom, while risky, and requiring the fed back-stop, has actually been one of the greatest financial innovations of the last century. Borrowers can take advantage of lower cost loans and loans that are tailored to meet very precise needs, from home mortages, to multi-billion dollar facilities, to credit default swaps. In the end, this has all been good for the globe. Now, if BB&T would realize that CREDIT IS A COMMODITY, just think what they might be able to achieve.