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Mendon Capital Advisors president Anton Schutz on whether Goldman's involvement with financial fraud related to the mortgage crisis has tarnished its ...
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Goldman Sachs meantime -- the half taxpayers however are all the hook for tens of thousands of dollars.
That's how much the senate and Justice Department's two year investigation of Goldman's role in the mortgage crisis -- cost taxpayers.
The justice department of course has decided not to prosecute Goldman Sachs or any of its employees.
For financial fraud during the mortgage boom.
They say the year -- senate investigation could not meet the burden of proof needed to make a criminal case.
-- take a look at how shares of Goldman are trading today down almost 1% what's making -- Goldman and financials.
There we -- ten Anton Schatz president amendment.
Advisors he's with us from Rochester New York he runs the Burnham financial industries fund and the financial services -- And -- to Goldman first what do you make of this.
I guess criminal charges weren't expected but it certainly doesn't help -- improved this firm's image.
Well I mean you know 56 million pages of documents.
And then no charges brought.
Mean that that that says a lot and obviously lot of money spent.
You know I I think that Goldman's been under fire for so many years now.
That you know I'm not sure it's a sigh of relief stocks up tremendously on this but.
I'm not sure a lot of the street was expecting charges on this one where another and quite frankly given the all the scandals we have out here.
For once Goldman does not really have any exposure of -- were scandal and you know that's that's actually you know in today's current news.
I I think a big deal a big deal for me is portfolio manager that I.
Potentially on -- stock and I do on Goldman and it does not have exposure Libor.
In terms of how you think that's playing out you look at how they broad financial sector stocks have done the financial sector spdr.
It's -- second best performing of the major sectors so far this year it's up fourteen and a half percent.
And -- doesn't seem like much fear is in any of these stocks about the economy or otherwise.
Well -- -- I think -- that the valuation of the larger cap ones you know it does show a lot trepidation and fear.
You know whether it's it's gold winner or JPMorgan -- or Citi your BankAmerica they'll -- it.
You know very low multiples -- -- book value and very low multiples of their their forward earnings self.
You know I would argue those are are are very cheap and their pricing in a lot of risk.
If you move up to the regional banks.
Did they -- much higher multiples they trade -- you know 11 point 31 point four times book.
Which historically not a high price but certainly relative to the 5067%.
-- book the big guys trade at.
I've been -- of course in the big ugly so unfortunately it's that's that's we've gotten a lot of news that's on -- they are very cheap and I think for a long term holders respect I think a lot of money can be made there.
If we ever get our economy on track this tremendous amount of money to -- -- there given how sensitive they are things like capital markets.
The big ugly is Ken well good -- -- filth they've that was cobalt and -- -- second spot and what about the potential for mergers and acquisitions in the financial sector are what should we be watching for -- -- The potential.
Affirmed our banks being acquired are big not even publicly traded they're so small.
Yeah there's a lot of very very small companies so out there.
There's over you know 2000 banks in the industry that between 250 million in ten billion in assets.
And that's a basket that that you can focus on into basket my small cap gonna burn fund focuses on.
What's going on today are these deals.
Because they're so small but they're neat thing that's going on is the buyer gets to add value to its own shareholders.
And the seller gets a premium and and that's really a win win scenario.
And why's this happening it's it's a tough environment there's -- along growth yield curve is tough the regulators put all sorts -- rules in place.
And so it's easier for that the consolidators to cut costs -- -- somebody.
And the smaller companies don't have access to capital markets -- they can't grow so it's really nice solution and in right now shareholders are winning.
You know by owning you know both sets forth the buyers and the sellers and in the case these -- deals.
-- great to see thank you so much and townships have a great weekend and -- topic.
