Monday, July 11, 2016

Invest in European Banks? Not This Week

       Well, now.   How are the largest European Banks doing these days?  Hmmm.  Not so good.  Not too bad, but, not really making a big impression with investors.   Let's look over some current valuations:
Bank stock price valuations 2016
European Institutions
Santander...............................-26%
Societe' General.....................-37
Credit Agricole......................-29
Standard Chartered................-12
HSBC.....................................-24
UBS........................................-38
Barclays..................................-47
BNP Paribas...........................-25
Royal Bank of Scotland.........-56    
Credit Suisse..........................-50
Unicredit................................-64
Deutsche Bank......................-47
      All of these figures tell a story about the current financial situation in Europe:  not good.  And with the Brexit voting results still being digested here and abroad, these numbers will not change much at all, and will probably get worse.
     American banks have also lost value(since January this year), but not as much.  Large banks have dropped about 20%, and JP MOrgan only 9%.  Bank of America falling the most at -24%.
     So, there is pain across the sector,, much of it self inflicted, and much having to do with increased 
regulations and regulatory oversight.  In other words, banks could not and should not be allowed to jeopardize the world economy by shoddy practices such as shadow banking and derivatives.
     The concentration of the global economy in these behemoths has proven to be a root cause of much international instability.  However, it appears that governments are finally willing to confront the abusers.   Good luck on that front.   

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