Two Ways To Play: FDIC Warns, "Don't Bank On It" Terry Woo Aug 26, 2008 4:50 pm |
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Bloomberg reports the U.S. Federal Deposit Insurance Corp, or FDIC, said its list of “problem” banks increased 30% in the second quarter to the highest level in five years. In all, 117 banks were on the list as of June 30, up from 90 in the first quarter. 2Q earnings for the sector fell from $19.3 billion in the previous quarter to $4.96 billion and down from $36.8 billion a year ago. It marked the second-lowest net income reported since the fourth quarter of 1991.
Chairman Sheila Blair said at a news conference that the results weren’t pretty and she doesn’t see a return to the high earnings environment any time in the near future.
So far, banks around the world have reported over $500 billion in writedowns and credit losses. Citigroup (C) leads U.S. companies, reporting over $55 billion to date.
See Professor Bennet Sedacca’s Dead Banks Walking?

From the Bull Pen: Bulls can consider Cash America (CSH) for a play. Bad times are good times for this company. Sell-stops can be set below $39.
From the Bear Cave: Bears can consider Discover (DFS) for a downside play. Will the stock get stuffed at its 200 DMA ($16)? Buy stops can be set above that level.
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