Was just gearing up to do some work on banks and CMA tanks. Oh well, my basic thesis is that C&I delinquencies and losses have lagged but this will be the first big quarter. Most bank valuations are very low, and with federal funds they may well be able to avoid dilutive capital raises, and be able to wait a few years before raising common. There are some banks that are still trading very rich. WABC is over 5X tangible book. I have to check that one out, because one slip and it will be cut in half. I am sure it has strong capital ratios, but it can still go to 2.5X book.
CMA has been one of my short ideas since summer. Of course the change of rules in september would have killed that position, but in the end they did cut their dividend and will have to do so again. they have grown in TX, but that state is not immune and will be dragged into things. They also have midwest exposure and construction loans, but I am waiting for C&I to fall off a cliff. I think this quarter but Q1 at the latest.
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