Go to PDF Version | Go to Recent Issues
To save time in the future, you may select one of the preferences below. You may update your eIBD preferences at any time by going into My IBD and selecting Update Your eIBD Preferences.
Set Web-Based Version as Default Set PDF Version as Default Set Recent Issues as Default
Get QuoteSearch Site
Daily Graphs Online
View Enlarged Image
Economy: Wall Street firms are said to be raking in the money. But don't tell investors. They're avoiding big bank and brokerage stocks — along with other industries in which Uncle Sam is involved — like the plague.
In a Sunday story that other liberal media eagerly regurgitated, the Washington Post asserted that "Wall Street" has amassed more profits in the first 2 1/2 years of the Barack Obama presidency than in all eight of George W. Bush's.
"The largest banks are larger than they were when Obama took office and are nearing the level of profits they were making before the depths of the financial crisis in 2008," said the Post, citing government data. "Wall Street firms — independent companies and the securities-trading arms of banks — are doing even better."
Surely these profits must be fueling solid, if not strong, gains by the stocks of such companies, making them a good bet in uncertain times. Right? Wrong.
Fact is, stocks of money-center banks are among this year's weakest performers.
As the tables above show, they rank 195th among the 197 subgroups tracked by IBD. Investment brokers rank just above the bottom 20, in the 177th spot.
And no wonder. Investors are shying away from industries that are being blamed for everything from the housing crisis to income disparity and socked with regulations that have grossly expanded the federal government's reach. Estimates put the annual cost of regulation at $1.8 trillion — a dead weight around the neck of American business.
Banks and brokerages aren't only examples, of course. No fewer than 14 of the 20 worst-performing groups in the list above are either heavily regulated or controlled by the government.
The low rank of the medical subgroups needs no explanation, what with government's imminent takeover of the health care system. Two of the three automakers have already been taken over, and look how their much-ballyhooed comeback has been greeted by the market. Their weakness has spilled over to "cousin" groups, including tire and original equipment manufacturers.
And at the very bottom of the list is solar — the industry on which the administration is putting all its (or in this case, our) money.
Now look at the best-performing groups. It is dominated by retailers, few of whom let the government tell them what to do.
Because it reflects market opinion, IBD's group rankings are the most objective assessment you'll find of the state of the U.S. economy. These days, it also serves as an indictment of government ineffectuality.
Global Crisis: The news these days is filled with stories about the euro zone economies and their ongoing crisis. But another, potentially bigger and even more important crisis is brewing — this one in China. Amid seemingly endless stories about the Chinese Miracle and how ...
Politics: Not so long ago, a new kind of superpower came into being. It was said to be a model for us all. Now, to put it kindly, the great experiment in "soft power" has hit a rough patch. For as long as we can remember, a leitmotif of American liberalism has been a certain ...
Allies: President Obama and France's Nicolas Sarkozy were caught agreeing privately that Israeli Prime Minister Benjamin Netanyahu is insufferable. History will rank the Jewish state's defender above his two critics. Beware microphones you only think are off. France's President ...
Industrial Policy: Not only do taxpayers subsidize failing green energy here, they may soon be on the hook for a Department of Energy loan to a firm owned by a Russian billionaire. Just say nyet. When a foreign firm wants to build a facility in the U.S. that hires American workers ...
Let's banish the budget fictions of left and right. The supercommittee — the 12 members of Congress charged with devising a plan to close mammoth deficits — cannot succeed without public support for its proposals. And public opinion won't come along if it embraces fairy tales. The ...
To participate in Community areas, please Sign In or Register
Register
Pick a group's leaders, not a group's laggards.
Get QuoteSearch Site
Read Full Article »
