Pros Say: Credit Markets are Thawing — Finally
Stocks were flat to slightly lower on Tuesday as tech slipped, banks fell and the economy showed that a recovery could be slow in coming. Banks again were in focus as major institutions reacted to stress test results released last week. Read and listen to what the experts had to say...
'Credit Markets are Thawing'
John Lonski at Moody’s Investors Service said he’s been seeing quite a jump in corporate bond issuance for both banks and non-banks, implying that "credit markets are thawing out at a faster pace."
Bank Nationalization Unlikely
“The systemic risk that banks will all be nationalized has gone off the table,” said David Dietze at Point view Financial Services. He said the fact that banks can raise capital privately indicates that they’re at a healthier stage.
European Banks: The Next Shoe to Drop
Paul Britton of Capstone said the European version of the bank stress tests have been announced “slightly behind the ball game,” and that it concerns him. He said the Austrian, Spanish and Scandinavian banks have huge amounts of exposure and "will be the next shoe to drop."
Investment Banks 'Don't Work'
Former Bear Stearns executive committee chairman Alan 'Ace' Greenberg said the investment bank model doesn’t work anymore. “It’s gone and it won’t come back,” he said. He expects more firms to participate in mergers and acquisitions.
Financials: 'Out From the Abyss'
Robert Barbera of ITG said financial stocks are still “wildly depressed,” but they are “out from the abyss.”Although the type of recovery for banks and the economy is still unknown, he said the U.S. has seen a lot of improvement.
Housing Stimulus Plan Doesn't Help
David Tobin of Mission Capital Advisors said the housing market is still “really thin” for homeowners looking to purchase a house or refinance an existing mortgage. He said the stimulus plan is only helping those who need the least help, as it largely caters to consumers with perfect credit, who are not over-leveraged and haven’t gotten involved in riskier mortgages.
Credit Card Company Crackdown
Susanna Montezemolo at the Center for Responsible Lending said credit card companies have been abusing customers for ages and this new legislation will set a “fair playing field so that consumers can get what they want.” Meanwhile, attorney Jacob Huebert said credit card companies should be able to raise rates if level of risk changes.
Infrastructure Spending & The Economy
Janet Kavinoky, director of transportation at the Chamber of Commerce, said the renewable energy field is creating good startup jobs for the economy. She said although there is much work needed across the board, the most under-funded is water infrastructures.
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