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Tom Belesis, John Thomas Financial CEO, on Moody's potential downgrade of major banks like JPMorgan Chase, Bank of America and Citibank, and how this ...
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-- here is this a sign that we could be facing another financials.
And other bailout.
Let's bring in John Thomas financial CEO Tom police's time great to see yes it's a day or Greek words by -- talk about Greece -- will be -- -- of these banks.
You're not that concerned about this are you I'm not David you know while a lot of these banks have been speculated as -- going to be downgraded its old news so.
As you saw you know that -- the banks you know have bonds has allowed knows what they were they were telling Gregory -- in the future we may have 32.
Or three run.
Cuts even coming I mean there may be more to come -- it.
So that is correct but they'll still be investment grade you know obviously gonna be difficult for banks to do business because of the regulatory burden and a higher -- -- -- course but overall.
Banks will still dubious I mean let's go back and look in August when the S&P downgraded.
The US PO credit.
What happened effect does that affected treasurys rallied significantly and that now with that pundits who call was of one run eleven -- We're almost thirteen thousand now to the market is always ahead of the -- Know what there's a little more transparency about the US government than there is about some of these banks -- was -- Elizabeth MacDonald knows how to read banks stage thought she said that a lot of these banks are covering up some of their losses awaited for five years ago.
Listen banks get very creative you know exactly and we know also does a government but at least.
The government is all you can see -- our deficit is every day we see the debt clock ticking down.
That's why don't think we our treasuries were hurt as much as the banks might appear bright and that's that's a great point given -- -- -- -- unless there's a major disruption.
In Europe.
The economy here is improving and it's gonna keep on improving and ECB regional bank index it's an all time -- So it shows should add that our banking system is healthy.
It's Europe that's -- might be the problem but I do believe that Europe will solve their issues -- over the global economy will -- to strengthening do much better and overall market well I hope you're right.
I and -- and again I don't wish anybody at bad at all I hope everybody successful but it could it -- that the banks are covering up some some bad.
Exit they have in her basket the way they were three or four years ago com.
I mean I do believe that you know you -- correct it in some notion of when -- -- being worried about it I'm correct but I don't know if it's -- we're not out of office and to me it's speculation but overall I mean the banking sector has been doing a lot better.
Then the way it was few years -- I -- liquidity needs a lot better than it was four years -- I -- Europe is the problem now in the main focus -- liquidity is better because we have interest rates at zero I mean how could you have bad.
Liquidity when when you're you're essentially being given money by the Fed that's correct and I think the banks Oakland a very valuable lesson over the last four years which is you know obviously you know to make sure that they don't get continue risky -- the way he did.
You know 45 -- and leverage fifty to one consent conservative consumer assets.
So obviously they going back -- -- banking habits of doing.
Business on a -- daily basis on which is with some exceptions like MF global exactly thought I think that is right there are there are some exceptions that -- bottom line then you use think that the banks because they do have this huge.
Hoard of cash that they have and I used to work poured it on purpose because some people say that could be spending more that are lending more that out.
When does that that's -- Begin to open up a little more you know I think as we get closer to the election.
And we see.
And you present a marriage in the White House I think you'd lose a lot of liquidity silence as you might be thought of -- -- -- president.
You know I think -- -- -- -- will keep muddling along.
But he won't be like a blast off as we would expect new president you think there'll be a blast up maybe 345%.
Growth correct.
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