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mickeyman
Penny Pincher Member
Canada
243 Posts |
 Posted - 03/17/2008 : 11:37:05
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What do you think the failure of Bear Stearns says about
a) the Efficient Market Hypothesis?
b) the share prices of other finacial institutions?
Look at the yield on Citigroup! Have you ever heard of a 9% yield on a bank stock? This is like the subprime mortgage lenders just as they began to blow up!
For those who are interested, of the big five banks in Canada, TD yields just below 4% ("safe"), whereas BMO and CIBC are yielding about 7% (yikes).
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Not all who wander are lost. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 03/17/2008 : 17:54:51
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quote:
Originally posted by mickeyman
What do you think the failure of Bear Stearns says about
a) the Efficient Market Hypothesis?
b) the share prices of other finacial institutions?
Look at the yield on Citigroup! Have you ever heard of a 9% yield on a bank stock? This is like the subprime mortgage lenders just as they began to blow up!
For those who are interested, of the big five banks in Canada, TD yields just below 4% ("safe"), whereas BMO and CIBC are yielding about 7% (yikes).
What do you think the failure of Bear Stearns says about
a) the Efficient Market Hypothesis?
I have always felt that the idea of the 'Efficient Market Hypothesis'
had the major overlooked flaw of the fact that the participants of the market are inefficient. People buy and sell not because by what the data says but what the so-called know-it-alls say the data says (Cramer, CNBC, etc.).
b) the share prices of other finacial institutions?
Other financial institutions have sub-prime mortgages in their portfolio along with Alt-A loans and other financial garbage. Expect another big bank or two to tumble like a house of cards.
Interesting times we live in, though given the choice, I would rather live during boring, and relatively safe times. |
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What the failure of Bear Stearns means
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