Banking Analyst Dick Bove, Rafferty Capital, on Financial Stocks
Feb 13, 2013|
Banking Analyst Dick Bove, Rafferty Capital, on Financial Stocks
Transcript - will not be 100% accurate
Comeback kid to see financial exchange at 933 on -- for staying -- folks. And the -- the Fat Tuesday Phil okay that's the opening bell the Dow is up 47 points S&P is up to. You've got -- trading down two dollars to 1647. NASDAQ trading down five points. To 3186. Oil that's rating of 22 cents to 9773. And -- that tenured US treasury gets up but only -- teeny tiny bit. Mean to one point 982 today. And got an interesting stat I think you'll find interesting anyway. Only one in nine US workers belongs to a union that's eleven point 3% of the workforce belong to a union. That's nationally that's the lowest percentage June since the 1940s. Participation. Is just 7% in the private sector. Verses 36%. In the public sector did you know that did you know that 36%. Of public workers. Are any union and I'm not surprised because of what you just said in the last break -- and that's that. There are not enough skilled. Laborers coming up. In the industry -- coming up in our country today to take up these these so called jobs literally 7% of the private sector is is in union and the rest is jealous that they're not right so they wanna get rid of them beats 93%. -- like. People like us right were and -- were not the public sector but if you work in the public sector 36% of the workers there. Our are unionized at that is not gonna last forever well and like you said to it's it's so it's these labor jobs you know you can't. Kids growing up today you don't see them all -- would you wanna do when you grow up. You know build buildings there you know -- announcement of do bricks you know. Pipe -- you don't see. No you don't you know yet I'll tell you where President Obama has done a really good job and beefed up his numbers. Since taking office in 2009. Food stamp rolls under president Barack Obama have risen to more than 47 million people in America that exceeds -- in the population of Spain. Now like I can't imagine that he had an objective. Of having more people on food stamps than the population stated this that he is this is a success story. Now's the time to act boldly and wisely to not only revive the economy. But to build new foundations. For lasting prosperity said President Obama during his first joint session. Address to congress on February 24 2009. Since then the number of participants enrolled in food stamps known as supplemental. Assistance nutrition program snapped. Will refer to would have snapped hereafter. Has risen substantially when Obama entered office in January of 2009. There were 31939000. Americans receiving food stamps as of November of 2012. The most recent data available there are 47. Million Americans enrolled in snapped that's an increase of forty -- after he so why are you always complain that he doesn't do his job. He increased his base that's is the only year he -- -- post. His -- 49% increase patents to his split up the rest of the country according to 2011 cents a Spain had a population of 46 million furthermore between January 2009 in November 2012. The food stamp. Program added approximately an average of 111000. Recipients per day. Well let me tie that's that's an accomplishment an accomplishment I mean that's. That's like enabling. People to never get off of that you largest you know you're used very mean spirited. -- Dick Boe day from -- pretty capital joins us now he's an expert on the financial sector Dick good morning welcome to the show. Dick I've been watch it financial stocks rallying -- two with what's going on in the financial sector -- the rally. I think it took people finally beginning to recognize the bank's earning a lot of money again in other words. Given fourteen quarters in a row in which the year earnings of banking companies have been up year over year. And that's obviously three and a half years secondly if if my numbers are right. In 2012 of the earnings were up 22%. And if again my members are right in 2012. The industry and a 145 billion dollars. Which is almost the most -- ever -- in the history of American banking industry. So well for the last three years -- we've been doing. I was there wasn't a political standpoint is pounding away at the banks they've been making huge amounts of money. It may make further it is this gonna continue Dick very have they peaked out in terms of their. Profitability. No actually think character on the verge of officially in big increases in earnings over the next few years. And you can look at it into fashion -- -- you can take a look at the structure of their balance sheets which showed that they have more capital as a percentage of baskets than anytime since. 1937. There -- forty year highs in terms of liquidity. Their loan to deposit ratio is. It's the lowest level it's been you know in at least 25 years I was so. What those numbers tell you is that the bank balance sheet can handle a great deal more business. If it comes their way and where's -- gonna come from well we think housing is gonna do well we think auto loans are looking really good we think consumer financial products to themselves. Is you know the energy industry Evian -- -- is that healthcare industries so you know that there -- whole bunch of areas where bank earnings. Are likely to grow because of increased along toward him and they have the capacity of their balance sheet to handle it. A lot of people lot of investors. Have owned shares of Bank of America and Citigroup for thirty years forty years fifty years and they relied on that stock for a dividend. When if ever are those companies Citi and Bank of America going to start paying -- provisional robust dividend as opposed to the penny a share. You know I mean it's clear that those two companies are tremendously disappointed. But long term holders of this document who's been made a commitment. To protect those people want to protect their investments and they clearly failed to do so. I'm having its march 14 of march 15. The banking regulators so the banks whether they can increase their dividends to Sierra not. And I believe that both Citigroup and at Bank of America. Will get the green light for the first time in four years to do something to increase the dividend. Increases stock buyback programs I don't think. It's going to be a very aggressive increased but I do think. That was starting on a process which is increased dividends. Most eight to 30% -- air ratios we'll have extensive four years. OK now I haven't been buying any European banks just because I'm uncomfortable with Europe is it safe now to go in and -- You know Banco Santander and some of the German banks French banks -- -- or or is there is is Europe's stolen turmoil as it too early. I think it's way too horrific took -- of the real problem in Europe is not that there is governed nations can't pay their debts it's that beats. Countries themselves failed to have businesses that can sell products globally. And it narrative that is that in the European banks still haven't written down. There assets to where they need to be based still haven't raised -- -- -- capital necessary. To cover those write downs and even though the start. They have picked up some -- from the from the doldrums of what everybody thought the Euro was gone. I wouldn't touch those banks differently to -- Not yet half might yet are very sorry Dick thank you very much for your time we sure appreciate it. You -- a wrap pretty capital joining us today on the financial exchange don't forget. Stay tuned we -- going to be giving away a family four pack of ski tickets to magic mountain June what is the password for our contest today. OK get another password it is minimum wage when you hear these -- sound effect. You call triple -- 2052263. Of the 25 -- all right up next we're going to be joined by Dan -- from Morningstar we have three not one not two but three different stocks to -- -- in the next segment stay with us.