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Carrington Investment Services Executive V.P. Chris Whalen on the outlook for the financial sector.
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It's sort of in the financial -- here large banks reporting earnings this week investors are wondering.
Will the rally continue or will not banks dominate the new year.
Chris Whalen he's Carrington investment services executive vice president joining me now with his take on large banks.
And a surprising twist on the housing recovery which gave you the clue that some of these guys -- that the move higher or lower.
How do you view data points from the housing market as we just have the truly -- CEO on.
That gives you a sense of which companies might do better in the financial world well ought.
I've just moved toward non bank financial firm very skilled asset -- sole community you can tell how I've voted yes.
I think it's you know it's a very tough time for the banks because of all the new regulations and you don't wanna be too big but you don't want to lose size rioters.
No it a lot of what we so let's hear your before as far as following was refinancings.
Much of it was spurred by government programs government subsidies of voters very telling that Wells Fargo actually kept nine billion dollars.
Where the loans that they could've sold into the agency market at a premium.
So they're trying to keep their balance sheet from shrinking it appears what was telling you about Bank of America's numbers -- the stock not responding well -- Well -- not a bad quarter if you take out all of the noise.
Ken and that's you know they finalists also was -- which is a big big go broad movement gold.
But the question is how could we get countrywide behind us we still have a lot of private investor litigation that's really the big challenge I think facing mourning him.
The -- overall is about doing bad but you can tell some of the -- but analysts aborted.
Backed away from -- -- -- its earnings report sort of largely benefited from lower borrowing costs threaten you see that it's likely cost.
See that in the next year that's what all of your provisions of -- about a slow -- down.
Well look no I think you seemed loan loss provisions -- is about as close they could go as far as the valuation of the company I think it's gonna -- opera where it is.
Was simply because people want the stock to go up.
But if you figure it's close -- rule book right now.
That done so well there's been such a nice from a well because the street was under weighted in financials they have run away from the big backs.
-- like little banks want to get them US Bancorp the buy -- really doesn't like it because they're too small and are -- very liquid in -- six.
Talk in new it says Chris survive buddies should I be in -- I have friends that are put every -- they have been BankAmerica.
Serious serious disasters Smart thing to do more I think it was a great trade for them because they started -- local -- single digit yeah.
The question is now is -- gonna go reported on -- I have no idea you know I don't -- make stock recommendations.
-- -- valuation basis I think the banks worth a lot more than it is today if you get the noise and the legacy issues behind OK but yesterday Goldman and JPMorgan came out with numbers that them.
My bicycle unimpressive but -- when you look overall though apartheid -- but some of these other guys it's from cost cutting don't call organic where they're -- totally new business doing one year from now when you're looking at JPMorgan.
They can't have the same magnitude dropping credit costs.
That's the problem so they're gonna have to funded elsewhere but Jamie Dimon took a hundred billion dollars out of the threat expenses look at the facilities our cost cutting but that's what I say I -- all the -- of real auto sales revenue is revenue is -- in the banking sector this year in my view and you have to -- save yourself -- how long -- could await the modular biodiesel and yield yeah.
-- one -- 2% dividend the Mike commoner 5% on the preferred because I think that's the future banks.
We're regulating them excessively so the gonna look like utilities for awhile.
The stock could be a lot of upside vigorous in the stock price let that be -- -- to use the investor Chris thank you figure much.
Great to see a pleasure Chris Whalen has Carrington investment services executive vice president closer.
