A contrarian viewI believe the Evergrande filing reinforced fears of another banking tremor. Maybe not a black swan event but the banking industry in the USA has been testing lower boundaries all year including the recent FED threat to force 6 mid-size banks to re-capitalize.
I don't see a pathway to the FED raising rates on Sept 20th and I highly doubt that the BoC will announce a rate increase on Sept 6th as all the metrics that I follow suggest a "wait and see" strategy. .
What are we really looking at for the banks in the short run?
I guess we will find out this week. I don't expect any traumatic increase in loan loss provisions which is what really moves the banks stox. In fact, I think we will hear a "business as usual" message from the banks with a bias towards holding rates.
I spoke to IR at Quadravest recently about BK. The don't keep tract of institutional vs retail holdings but the indication was that they believed that a large majority of both the BK and BK.PR.A shares are held by retail investors. That kinda surprised me as I expected the prefs to be held by funds while the commons would be held by retail.
My gut tells me that the spike down in the BK share price is more a function of a fear-response from retail investors worried about the 2x leverage than any "exit" from pros.
Mouse: I don't think that net selling of 40,000 shares by Anonymous is an indication of anything ominous. I certainly appreciate all that you do here and the chart that you provided today reinforces my belief that BK is widely held by retail investors. Retail investors almost always react on emotion and often make the wrong decision in moments of uncertainty.
I was going to buy more at $12.60 but didn't. I think I will regret that decision by the end of the week.