National City On Probation And Banking Index Hits New Lows
I've been very critical of banks since starting this blog. It's just silly and completely incompetent for anyone to be telling us the crisis has passed as so many have. Do you know quantitatively what needs to happen for this crisis to pass? Qualitatively? Something you might want to think about. I could cite a multitude of market professionals in the press and on television who have told us to buy banks since this environment started unfolding. But these are the same people telling us to buy banks when they were at all time highs and enthusiasm for Goldilocks was dripping. They didn't know what was happening on the way up and they still don't know what is happening on the way down.
A handful of months ago, Morgan Stanley upgraded National City after it had fallen substantially. I wrote at that time someone needed to downgrade Morgan because they obviously didn't know what they were doing to be upgrading National City. Since then, National City has falling about another 40%. Now, when the wheels are falling off and the company is down about 85%, OCC regulators are finally scrutinizing National City. Ya think? Reuters writes the bank is working with regulators to ............ what? The damage is done. Now, when the company can least afford it, regulators come in and put more pressure on the company. I don't question the need to do this but would it not have been prudent if this had occurred five or ten years ago? Or before lax enforcement of regulation and repeal of many regulations created a mess? To ensure a mess would never be created as part of ongoing prudent oversight? And, to do so pro-actively when National City was financially sound?
It's ironic that the Office of the Comptroller of the Currency has seemingly pushed back against state involvement in resolving many banking issues. Effectively taking the position that banks are their jurisdiction and they have the situation under control. All while states take a position of consumer advocacy and protection in attempting to deal with this.
With the banking index at new lows, we can be assured they don't have anything under control. It's also ironic that the OCC has the following on the home page of its web site. - "Ensuring a safe and sound national banking system for all Americans." For some reason I am lacking in confidence in this statement. Could it be because banks have been engaging in activity that nearly guarantees an unsafe and unsound national banking system? And the that OCC seemingly was asleep while this happened? And the current head of the Treasury that is responsible for the OCC was the CEO of one of the major banks that appears to be a major contributor to this unsoundness?
Now we hope and pray the wheels don't fall completely off the system. Somehow, I'm not encouraged by hoping and praying as a strategy. Either for my future or for that of the banks.
A handful of months ago, Morgan Stanley upgraded National City after it had fallen substantially. I wrote at that time someone needed to downgrade Morgan because they obviously didn't know what they were doing to be upgrading National City. Since then, National City has falling about another 40%. Now, when the wheels are falling off and the company is down about 85%, OCC regulators are finally scrutinizing National City. Ya think? Reuters writes the bank is working with regulators to ............ what? The damage is done. Now, when the company can least afford it, regulators come in and put more pressure on the company. I don't question the need to do this but would it not have been prudent if this had occurred five or ten years ago? Or before lax enforcement of regulation and repeal of many regulations created a mess? To ensure a mess would never be created as part of ongoing prudent oversight? And, to do so pro-actively when National City was financially sound?
It's ironic that the Office of the Comptroller of the Currency has seemingly pushed back against state involvement in resolving many banking issues. Effectively taking the position that banks are their jurisdiction and they have the situation under control. All while states take a position of consumer advocacy and protection in attempting to deal with this.
With the banking index at new lows, we can be assured they don't have anything under control. It's also ironic that the OCC has the following on the home page of its web site. - "Ensuring a safe and sound national banking system for all Americans." For some reason I am lacking in confidence in this statement. Could it be because banks have been engaging in activity that nearly guarantees an unsafe and unsound national banking system? And the that OCC seemingly was asleep while this happened? And the current head of the Treasury that is responsible for the OCC was the CEO of one of the major banks that appears to be a major contributor to this unsoundness?
Now we hope and pray the wheels don't fall completely off the system. Somehow, I'm not encouraged by hoping and praying as a strategy. Either for my future or for that of the banks.
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