by Jack
When it comes to knowing how we’re doing overall the government has their key indicators and I have mine. Mine are generally a whole lot easier to understand, if not more accurate, and you don’t have to be Harvard economist to figure out how the economy is doing with my method. You need only to know where to look and that would be bank stocks.
Bank stocks are the fashioned economic barometer. They are the tried and true litmus test that’s worked for us for hundreds of years. Lets pick a few really big ones and average them out and see how we’re doing…k?
Bank of America is a powerhouse and has been for well over 50 years. That’s a good pick, so lets start with BAC. Way back in 1991 BAC stock was selling for around $10 bucks – two decades later and it’s selling for around…. $10 bucks? That can’t be right? Okay, lets try another, Morgan Stanley. Now there’s a bulwark bank stock if there ever was one! Let’s see…in 1991 MS was around $10 bucks and today…and today, it’s selling for…hmmm…$10 bucks?
Well how about good ol Washington Mutual (WaMu) they were always a…oops, forget that one, they disappeared with Lehman Bros. Alrighty (sigh) then lets try one of the nations largest, (too big too fail banks) Citi Group. Their stock (C) was selling in the $400 to $500 range for the longest time and now let’s see how they are doing: Yikes…this can’t be true, they are selling for $37 and change, thats a drop of over 90%! What about GMAC, Paramount, High Trust, First Choice, Atlantic. Butte Community bank, ….they, ….they are all bankrupt and so are hundreds of other with assets exceeding $400b!
Well kids…so much for my litmus test, you better hope for change soon, and I think I need to go take couple of aspirins and lay down. . . see you tomorrow.