XLF

Why We Don’t Like Dividends of Banking Firms: 4 Very Good Reasons

by

Untermyer: Is not commercial credit based primarily upon money or property? Morgan: No, sir. The first thing is character. Untermyer: Before money or property? Morgan: Before money or anything else. Money cannot buy it … a man I do not trust could not get money from me on all the bonds in Christendom. –Mr. JP Morgan’s testimony before the Pujo Committee (questioning from Samuel Untermyer), 1912-1913 Reason #1: A Bank Run Is Always Possible Though the history of banking dates back to as early as 2000 BC in Babylonia, the makings of the present-day banking system in the US really didn’t take hold until the beginning of the 20th century. Some financial historians may argue for a later date, but we … Read more

Economic Commentary: Bank Earnings, US-China Phase One No Big Deal and More

by

Bloomberg recently reported that U.S. banks’ record-breaking earnings have likely peaked for this cycle. We’ll get the team’s thoughts on this, and we’ll also cover views on the corporate credit cycle, China GDP, and the US election cycle. We don’t think the US-China Phase One deal amounts to much, other than removing the uncertainty that it, itself, created. Let’s kick things off with our views on a recent Bloomberg piece, U.S. Banks’ Record-Breaking Earnings Streak Has Probably Peaked, “which notes that “global interest rates remain stubbornly low and geopolitical tensions (remain) high.” Matt Warren is Valuentum’s Independent Bank and Economic contributor, and we’ll start there. Matthew Warren: The views expressed in the article seem a bit overly bearish assuming the … Read more