World's 15 Biggest Banks Get Downgraded -- What This Means for "Safe Banks"
Another one of Robert Prechter's Conquer the Crash forecasts comes true
June 29, 2012
By Elliott Wave InternationalToday's news that the losses suffered by the biggest U.S. bank, JP Morgan Chase & Co., may be as big as $9b instead of $2b, as previously announced, came on the heels of another noteworthy news report from the world of banking.
On June 21, Moody's Investors Service downgraded 15 of the world's largest banks, including the U.S. second-largest bank, Bank of America. Says Reuters: "...the downgrades reinforce a trend that has seen weaker banks punished for their risk-taking, while stronger banks are rewarded for conservative funding models, ensuring lower costs and higher margins."
And, "The ratings...gave a competitive advantage to 'safe-haven' banks that fund themselves with stable, low-cost customer deposits..."
This seems like a good moment for those "safe-haven" banks to toot their horn a little, as it might just get them more business -- just as this quote from Ch. 19 of Robert Prechter's Conquer the Crash had predicted:
"...relatively safe banks, if they have the sense to inform the public of their safety advantage, are likely to become even safer during difficult times. Why? Because depositors in a developing financial crisis will move funds out of the weakest banks into the strongest ones, making the weak ones weaker and the strong ones stronger."This year marks the 10th anniversary of Prechter's Conquer the Crash, and to mark the occasion, we have put together a special free report for you: an except with 8 key chapters from this forward-looking book.
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