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Moody’s Showing No Love for Bankers

Moody’s has downgraded a number of banks–once again on the worries about commercial real estate. Obviously this is not a new worry, but it continues to help put a lid on banking preferred stock price increases. I had very healthy capital gains in most all of my banking issues, but some of that gain has melted away–it it probably a good time to cut back some of these issues preserving decent, although reduced, gains. If you want to see the huge number of downgrades by Moody’s you can scroll through them here.

Equity futures are showing losses this morning with the S&P500 off about 3/4%–at the same time interest rates (the 10 year treasury) are back down to the 4% area – are they headed back to under 4%? We have big treasury auctions yet this week which may pressure rates-but honestly no one knows for sure so we just play the hand we are dealt.

I continue to watch CD rates and we have seen no ‘bump’ higher in rates since the last Fed Funds rate hike last week. I was hoping, based on history, that we would get up to 5.6 or 5.7% which would have made decisions easier as my CDs and Treasuries mature–I would take plenty at 5.7% for sure.

It looks like we have seen a short term peak in oil prices (west texas) around $80–I sure hope so since the last few trips to the gas station have been getting progressively more painful. I am paying $3.89 for unleaded in Minnesota –that high enough.

Well let’s get this show rolling and see if stocks can bounce up from a lower opening–there is a lot of FOMO out there and each time we have a small setback in prices buyers come in and drive prices higher.

17 thoughts on “Moody’s Showing No Love for Bankers”

  1. The talking heads in the news today were all saying the market is falling and it did start out the day with the DJI down almost 350 points ( 1%) but climbed back out of the hole to end the day only down about 160 points
    Also sold a partial position of my holdings in HTLFP for a profit before the price dropped. Holding good on my WTFCP have a low ball order in on some NYCB PU in case someone panicks and sells at market.

      1. August, I may have an overweight position already in this but one of the few cumulative bank preferred left and good for a swing trade.

  2. Bill S./Private:

    Unfortunately, Washington (state) is giving Calif a run for its money. Gig Harbor (near Tacoma) Costco is $4.95/gal., the cheapest around. Our woke Governor (Jay Inslee) is a comrade in arms to Gavin Newsome. He put ANOTHER 50 cent/gal state tax on gas at the start of the year. Lucky us!

    1. Robert Fraser :
      Got a call from my sister last nigh who lives in Puyallup, seems you two are in agreement 🙂

    2. I think this is the first time I’ve seen the word “woke” on this site. Hope it’s the last.

    3. Just filled up my F150 at that same gas station yesterday. Cost more than even a steak dinner! With the highest gas prices and the lowest KWH cost in the country it’s time to start shifting to EVs.

    1. I can’t remember when we last had gas prices starting with $3.xx. currently around $4.65. People Republic of CA goes to great lengths to keep our gas prices up.

    2. In the high tax state of NY just paid $3.59 at Costco. Who’s getting those profits in Ca?

      1. Most of it goes to the state. huge taxes, “global warming” fees, etc. We were highest in the country until WA took that title away from us. I have confidence our governor/super-majority legislature won’t let that stand.

        there is a “mystery charge” that came up when the state investigated why prices are so high. Looks like that is going to the oil companies.
        California insists on using unique gasoline blends so we are an economic “island” , which allows companies to overcharge because cheaper gas can’t be imported from neighboring states.

        In addition, we switch between summer and winter blend gasoline every year (it has to switch on a certain date, so no transition periods), so that also allows for huge price gouging from the refiners (built in artificial shortages twice a year).

        1. It’s the government its constituents keep voting in the same leadership! But people are voting with their ‘feet’ and moving out of Ca…..Expect more of the same!

  3. At around 5-ish, MMFs are a good place to hang out for a while but interest rates look like they are going to melt in 2024. Broke my rules and replaced some maturing mid-4 CDs and T-bills with longer dated GSE’s and corporate notes at around 6 to juice my yield. Callables work for my program. Corporate notes can be dicey, and are not 1-1 replacements for CD’s. I am reading the paperwork and googling “tax treaties” on foreign bank issues.

    Moody’s, good analysis of the risks, but, like Fitch, they are late to the party. Jimmy Stewart got there first. (The bank run scene in “It’s a Wonderful Life”, 1946. ) FWIW, the market does not seem to buy into Moody’s (and the Fed’s) “higher longer” interest rate prediction that they base their conclusion on.

    Just my opinion. DYODD.

  4. Perhaps an example of whistling past the graveyard, but what’s being overlooked in most of the headlines about this action by Moodys is that many of the banks shown in the scroll of today’s ratings actions are actually receiving affirmation of their current ratings and only having their current status changed from stable to negative (for now). Those that are being actually downgraded now are being taken down a single notch , from A1 to A for example..

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