Bove asserts that the S&P should not be held responsible for the downgrade. The U.S. balance sheet is really a joke. The national debt and it is exponential gains are going to be not possible to pay off. There was virtually no other choice, but a limit. It could be (maybe should be) a lot worse. "You've got a company that is losing about $1.4 trillion this particular year, probably will lose somewhere around the trillion dollars over the next couple of years. This owes $14.4 trillion (and) over the next 5 years that will get up to $20 trillion," the Rochdale Securities analyst stated.
"So there's no likelihood whatsoever this particular company is capable to pay down from its own resources the actual amount of debt that it offers, nor is there any probability that it's going to get rid of it's deficit," he additional. "If that was a real company, obviously, that would be a junk relationship."
It's time in order to embrace that change and quit with futile attempts in extending the turmoil. "We're building a book currency around a country that is bankrupt and can't pay its financial debt. How can you in essence be aggressive as well as say, 'I know where the base is, or I know how this really is going to adjust'?" he said.
"We have individuals buying Treasury securities because they're concerned about the Treasury," he additional. "We've got people selling banks shares, taking the cash and placing into the banks for security. It doesn't make sense. What you're viewing is this adjustment is occurring and individuals are not sure how to respond to this adjustment."
On the positive note, Bove recommends one seemingly imprecise choice if you still are interested bank stocks: Bank of America. Yes, they faced the crucially sharp sell off yesterday (Mon), only to be followed by a good impressively sharp rally these days (Tuesday).
Bove's not buying any kind of stocks right now, but if he or she did, he'd go for Bank of America. According to Bove, Bank of America has a "ridiculous"