We all knew billion dollar fines were coming. We now know that they are just speeding tickets. Bank of America, Wells Fargo, JPMorgan and others thought they were getting strategic assets at bargain basement levels. Turns out take-overs were not worth it. Big money spent should have been kept inside. Billion dollar fines will always be a bad use of capital.
The banks will survive because they are too large to fail.
However you have to ask “How smart was that board of directors to buy a pig in a poke” what will they do next time. What grand strategy will they have.
Banks are the most difficult investments to analyze. So you decide to follow good management. Except you cannot find good management. When they had the chance they bought crap.
George Gutowski writes from a caveat emptor perspective.