Tweet

Why Banks will continue to get Healthier!

Written by: Sean Hyman

Article Overview: You know things have gotten a lot better when one of the biggest concerns in the economy is commercial real estate, because six months ago this was something that was put to the back of the worry list and here it is at the fore-front.

Why Banks will continue to get Healthier!

You know things have gotten a lot better when one of the biggest concerns in the economy is commercial real estate, because six months ago this was something that was put to the back of the worry list and here it is at the fore-front.The regional banks may still have a lot of sweating to do, but do you really think they will be made to suffer?This is the bailout nation where everyone is a winner! Especially the banks!

Banks like JP Morgan Case (JPM), Citigroup (C) and Bank of America (BAC) have all been up quite a bit in the past couple of weeks on heavy volume. They are off today as I write this, with the Fed meeting over the next couple of days.

Here is why banks will continue to get healthier, but as always do your own analysis:

Real Estate: The home builders stocks have rallied significantly (XHB) and what's good for real estate is good for the banks.As Real Estate continues to stabilize and foreclosures become less and less a problem the banks become more and more attractive.

Consumer:There has been a lot talk about the consumer lately, and yes the consumer is beaten down a bit, but still consuming none the less.Instead of charging things on their credit cards and being in denial about it, they are going out to eat to discuss their finances and charging the meal on their credit card.

Yield curve:The banks still have a great interest rate spread, and "Big Ben" Bernanke is not going to be raising rates anytime in the near future.

Government Back Stop:If the government was going let these banks fail they would have done it already, and they are obviously not.There is a lot of more room for growth now, and the economy is improving significantly.

Sure there may be a double dip recession, and there are a lot of bears that are denial about the fact

there will be a recovery and growth in the 3^rd and 4^th quarter of 2009. They have locked themselves into a pattern where all they see are bad things happening.

Related Articles
  In 2010, 157 banks were closed, a pace of about 3.0 banks per week
  SMEs - SMEs and South African banks
  Surround yourself with laughter
  9.3.4 Commercial banks: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
  Banks Continue To Hold Back on Lending

Article Tags: bac, bailout, bank of america, ben bernanke, big ben, citigroup, citigroup c, commercial real estate, couple of days, credit cards, denial, fed meeting, foreclosures, home builders, interest rate, jp morgan, regional banks, six months, stocks, yield curve



Related Forum Posts
Would you give up ownership of your company? - Basically I wouldn’t like to give up ownership. I would like the company to continue to reflect my ideas. But I may consider giving up ownership if economic conditions continue to worsen.
Raising Capital for an Invention - There have been alot of great ideas and concepts already discussed here but I will add that love money is a great way to get the ball started. Family and friends that believe in you and your concept can asked and should be asked first. Banks and other lenders are always more eager to give you more - but getting the start up investment proves to be the most difficult. Remember ACRES of Diamonds and look in your own backyard first. Jude
Re: Invest in Real Estate or Stocks? - I would say real estate. I've recently attended a real estate buyer's workshop (which are available in many many cities!- Look in Craigslist or major real estate company events) because my partner and I are thinking of investing in a income property. I am not so sure about the U.S now, but in Canada the value of real estate is rising- depending on locations of course. On top of that, Canadian Banks are offering excellent interest rates. With the way the economy has been, one can say that trust in stocks has diminished a lot..
Intro in doses - I think that has more to do with parental guidance rather than enforcing what they would like their child to be when he/she grows up. Parents need to take on a role as a Guidance Counselor would in High school these days - that includes introducing their children to new environments so that they are exposed to an environment they enjoy without enforcing it. e.g. Instead of a parent saying you should become a doctor! They could introduce the environment through "chemistry sets", the Science Center etc. etc. If the child automatically enjoys these environments and doesn't resist it then continue introducing the environment in greater doses. If they resist then continue exploring other environments. The caveat is that with today's lifestyles some parents can't commit to doing this.
re: restaurant start-up - I'm not sure about government grants for restaurants, but my recommendation would be to approach a lender that offers loans under the Canadian Small Business Financing Loan program where the government will guarantee 85% of the loan. You can borrow up to $250,000 to finance equipment and renovations under this program. Restaurants are very risky business, however some of the Chartered Banks will look at restaurants if there is enough of an initial equity investment and you have a solid business plan (experienced management team, good concept and strategic location).


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Paint A Word Picture - Excite Your Customer

The Death of the Sales Magazine

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.