GarrettMcAuley: "The Bank of America’s unrealized bond portfolio...

GarrettMcAuley: "The Bank of America’s unrealized bond portfolio losses now exceed $100 billion.  That’s about the equivalent (on a pretax basis) of half of the company’s tangible common equity.  Wow."

https://x.com/rcwhalen/status/1825487809630585310

...and people are still buying bank stocks which are also trading at elevated valuation levels.

...I see it differently, its the dividends attracting investors to bank stocks, so bank management will entice them with good dividend yields. They (investors) don't care as much if they don't make capital gains as long as they get their dividends.

...take a close look at XLF chart - in May 2007, it traded at $30.07, suffered a crash of -79.95% to $6.17 in Feb 2009 during GFC, and took 12 years to recover to $30.78 in Dec 2019! Arguably, XLF is now even more stretched than its rally of +78% prior to its collapse in 2007 (from $16.85 in Mar 2003 to $30.07 in May 2007 over 4 years) as this time around, it gained +210% from the Covid lows of 2020.

...those bond losses are not the only losses in the books, the additional NPLs from a CRE bust in progress/motion as well as other hidden risks from portfolio trading could possibly test bank solvency even at the Tier 1 level of US banks.

...Bottom line: IMO you are nuts to be buying bank stocks now. You want dividend without a likely capital loss- get into term deposits ($250k guaranteed under Federal Govt).

All time view chart
XLF Stock Fund Price and Chart — AMEX:XLF — TradingView