Chillin' out till it needs to be funded
The Deutsche Bank cheat sheet has already been summarised online and while DB’s wait and print report policy on far reaching sell side research previews has been solid in performance, it also starts showing strains as both Buy side and Sell side Bank analysts try using older paradigms to explain away now that European Banks are done with their extraordinary edge thru 2010 and the Big four pecking order for them is apparently the same it was in the beginning of 2012
While Citi and Morgan Stanley analysts are still running good timing, we think we slowed down a bit to rightly overhaul our basic tenets paid lip service by analysts. Admittedly what triggered off was the cheat sheet’s glaring omissions, former bankers and analysts still spending far too much time on morgan Stanley and far too less on Wells Fargo. The latter’s current Public relations drive with analysts is a grand opportunity to waste away on ignoring Wells Fargo for just having a strong market franchise in mortgages which gives them more than 35% of the US market.
Similar strategy faux pas by Bank strategy desks are almost as demeaning to the revolution in place currently as Morgan Stanley makes a late return to bank compensation as a stem of further drift which admittedly is needed in its own ranks In the Citi analysts we caught a brilliant piece on the bluster season of optimism being replaced by a season of dissent but bank research notes on the sell side teams are markedly banal after the catharsis at JP Morgan, Goldman Sachs and Citi. Of course it is not helped by the fact that the coming few earnings reports for Q3 and Q4 will likely be staid climb backs on the road to recovery and even the revised 12% RoE target at the big and medium banks are unlikely to come to pass till September 2013 at the earliest, leaving the lack of interest and hibernation time for analysts looking for a break in the clouds to a lasting future trend fairly annoying and frustating for them including the likes of ex bankers Mike Mayo and Meredith Whitney who may be ready to come back to more central “re-organisation ” themes as much as Sally Krawcheck.
Next week is likely to start off a four day marathon from Friday showing upward rerating of EPS at JP Morgan and Citi, a strong recovery and big earnings from Goldman Sachs again “despite trading” and a mortgage only report but strongest in ells Fargo while we struggle with why cost cutting is not done at Bank of America and Credit Suisse is it really the crisis or time to drag out weak management heads..We will try to detail next week’s earnings details in a few hours and definitely before the Monday Night game. This week’s NFL strikes me as important with Robert Griffin III trying Matt Ryan and his Defense’s undefeated Falcons and the 49ers trying to get to form in the game against the Bills while the Patriots finally get a sitter to confirm whether they win or they lose going on in Brady’s sunset years.
Keyword(s): Bank Earnings, JPM, GS, WFC, BAC, Earnings Season, C, CS, DB