Finally we get a bounce in banking and insurance preferreds after the SEC mentioned potential market manipulation in small bank common shares. I mean is there any doubt than big players have been instrumental in the pummeling shares have taken–although not necessarily illegal. Of course I am talking my book–I don’t like losses or worse yet seizing of banks by the FDIC when there are ‘runs’ on other wise reasonably strong banks.
Do I think the issues are over with – NO! It is going to be a long time until this is behind us.
I did not sell me banking shares in the community banks since we are seeing a glimmer of hope–we’ll see where this goes next week. The reason I considered selling is because there is no telling which bank will be taken down and shares end up at zero. I am positive holders of First Republic preferreds thought they would eventually recover–obviously not. I am 70 in a few months and there is not time to recover massive losses (although I am going to live to 110) I continue with very nice gains since December so I am now in capital protection mode until we resolve the banking issues.
Employment was much stronger than forecast–not helpful for that potential rate pause, but lots of data to come out in the next month so we will see where that takes us.