thinking of buying a $ denominated bank etf

[markowitzman]

there appears to be a panic selling in this sector?
Coupled with dollar weakness is this an entry opportunity for an etf purchase?
I cannot understand how a major us bank loses nearly 10% of market cap when it has the guts of a trillion or more in liquid assets?
And to make it more odd all the banks in the sector lose the same market cap based pretty much on market sentiment.
That said call/put ratio rising all through this year so many investors have beeen killed based on the same "hunch" as mine!

 

[Labguy]

So what's your question?

 

[shanegl]

I cannot understand how a major us bank loses nearly 10% of market cap when it has the guts of a trillion or more in liquid assets?

You need to consider the bank's liabilities as well.

 

[extopia]

Which might include billions of dollars in dodgy loans secured by properties it can't sell.

 

[markowitzman]

Buffett bought more us banks this week.

 

[z109]

Er, assets = outstanding mortgages, commercial paper = liabilities! Most of them are very illiquid.

The US bank you are referring to (by way of example) is referenced [broken link removed]. The arguments contained in this piece apply to many of the US bank stocks. That is why risk-averse investors are running scared of them.

 

[markowitzman]

That is why risk-averse investors are running scared of them

While maskter investors relieve them of their stocks.

 

[dunkamania]

If you consider a bank thats leveraged 10:1,then a $1 erosion of capital base translates into $10 decrease in loan book.The prices of US equities had continuing high growth factored in,which is looking less likely.Also the credit crunch is not going away,banks margins for borrowings are increasing.