Fast Money: Rapid Recap - The first and only official show synopsis
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Bove: Expect Goldman To Increase Dividend Meaningfully
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If there's anything that Wall Street doesn't like its uncertainty and it seems there's an abundance of it in the financials.
From the threat of a government crackdown to bonus outrage it's no wonder the Bank ETF too a sharp turn lower midweek.
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In light of all the uncertainty, how should you trade banks? For insights we turned to widely followed analyst Dick Bove of Rochdale Securities.
Wall Street Crackdown
On Thursday Treasury Secretary Tim Geithner sparked fear in the hearts of investors when he signaled the administration is a few steps closer to cracking down on Wall Street and laid out four cornerstones of overhaul.
Although we won't get into the nitty gritty here, Dick Bove has done extensive analysis of the reforms and tells Fast Money the administration’s new regulations will likely make the business of banking much less profitable.
“They’re going to push business out of the banks,” he says. And that will harm consumers.
”About 30% of consumers will find that banks don’t want to do business with them anymore,” he says, because banks will lose money on them. “We’ll see banks fire their customers and kick them out of the banking system.”
But that doesn't mean there's not a trade.
“The winners will be consumer finance companies, payday loan companies like Advance America [AEA
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] and companies that move funds like Western Union[WU
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] , ” says Bove. Many consumer will have no place else to go.
Regional Bank Woes
But his bigger concern is the impact of a crack down on regional banks [KRE
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], which he thinks won’t grow as rapidly in the future because there will be significant controls on their revenue growth.
"That makes them totally unattractive stocks," says Bove.
Although regional banks may surge short term on reduced losses from commercial real estate at some point in time "I’d definitely be selling regional banks stocks and moving into these non-bank sources of finance for consumers," mentioned above.
Goldman Dividend
We also talked with Bove about a report in the WSJ that said some of Goldman's biggest shareholders have asked the bank to cut what could be the biggest bonuses in its history and pass more profit onto investors.
Although the investors are not pushing for a huge cut, they feel Goldman [GS
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], which received $10 billion of taxpayer help during the credit crisis, should better reward them for this year's rebound, the paper said.
That creates an image problem for Goldman but Bove isn't worried. He says, "Goldman is doing everything possible to re-establish it's image in the marketplace. And I think they will increase their dividend meaningfully to solve that problem."
When might that happen? "I think within the next 3 months,” says Bove.
You heard it here, first.
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- Mega-Commodities Deal Puts Resource Stocks in Play
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Trader disclosure: On Nov. 20th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Pete Najarian Owns (DE) Calls; Pete Najarian Owns (DELL) Calls; Pete Najarian Owns (GE) Calls; Pete Najarian Owns (INTC), Is Short (INTC) Calls; Pete Najarian Owns (KRE) Calls; Pete Najarian Owns (LLY) Calls; Pete Najarian Owns (UUP) Calls; Pete Najarian Owns (BRCD), Is Short (BRCD) Calls; Pete Najarian Owns (LAZ), Is Short (LAZ) Calls; nerman's Firm Is Short (IJR), (IWM), (MDY), (SPY), (USO), (UNG), (TLT); nerman's Firm Owns (CLX), (CSCO), (MSFT), (NOK), (WMT), (SFC), (M); nerman's Firm Owns (BAC) Preferred, (BAC), (BAC) Calls; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm And Finerman Own (SFC); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Owns (BCR), (BDX); Finerman's Firm Owns (BGC), (BGC) Calls; Terranova Owns (UNG) April 2010 Calls; Terranova Owns (POT), (GOOG), (AAPL), (FCX), (RIMM); Grasso Owns (AAPL), (ABK), (ASTM), (BAC), (BGP), (C), (COST), (FAZ), (PFE), (MRK), (V), (WMT)
GE Is The Parent Company Of CNBC
NBC Universal Is The Parent Company Of CNBC
For Steve Graso
Stuart Frankel & Its Partners Own (CMCSK)
Stuart Frankel & Its Partners Own (CUBA)
Stuart Frankel & Its Partners Own (GERN)
Stuart Frankel & Its Partners Own (HSPO)
Stuart Frankel & Its Partners Own (NWS.A)
Stuart Frankel & Its Partners Own (NXST)
Stuart Frankel & Its Partners Own (NYX)
Stuart Frankel & Its Partners Own (PDE)
Stuart Frankel & Its Partners Own (PRST)
Stuart Frankel & Its Partners Own (RDC)
Stuart Frankel & Its Partners Own (ROK)
Stuart Frankel & Its Partners Own (TLM)
Stuart Frankel & Its Partners Own (XRX)
Stuart Frankel & Its Partners Own (SDS)
Stuart Frankel & Its Partners Own (TBT)
Stuart Frankel & Its Partners Are Short (QQQQ)
Stuart Frankel & Its Partners Are Short (CL)
For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBC)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (UA)
For Brian Stutland
Stutland Equities Is A Market Maker In VIX, Is Long Volatility
For Jon Najarian
Jon Najarian Owns (AMZN)
Jon Najarian Owns (WMT), Is Short (WMT) Calls
For Robert Stevenson
FPK Or Affiliates May Seek Investment Banking Compesnation From (RYL), (TOL), (DHI), (PHM), (LEN), (KBH) In Next 3 Months
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