If there is a involuntary restructuring on Greek debt, the capital market banks may take a sizable charge. They should be able to withstand it, fairly easily due to their capital cushions, but it may lead to a hick-up in their stock as more certainty arises.
From my data base of info originally established on 11/16/2011 via a Bloomberg article:
"Guarantees provided by U.S. lenders on government, bank and corporate debt in Greece, Italy, Ireland, Portugal and Spain rose by $80.7 billion to $518 billion in the first half of 2011, according to the Bank for International Settlements."
The numbers are absolute terms, and will not be nearly as much because corporates debt should not be affected.
The above is why banks in capital markets are trading below book value. As they appreciate toward book value. Weakness from the above I would view as a buying opportunity. (I just do not know yet at what price that opportunity will be. I am using GS as my trading vehicle for this, but JPM may be better as its retail operation will benefit from the US economic strength and housing bottoming.)
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