Karen Finerman
speaker
87 appearances
1 recordings
1 series
first heard Apr 2025
last heard Apr 2025
Karen Finerman’s voice in public audio — every appearance, attributed to the second.
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Appearances
Right, whatever it might be. The one thing it does help is that our goods are comparatively cheaper, right? So If you're European and wanted to buy an American-made whatever, take away the tariffs for a moment. It got a lot cheaper. It got 8% cheaper in the last, I don't know how long, from when you said it was around $1.08 or so. So things got cheaper. That makes us a little bit more attractive.
Also, it does help multinational companies when they report earnings. So let's say you're Procter & Gamble, you sell $10 billion in Europe and you convert your euros back into dollars, you get more dollars, your earnings will go up. But I always dismiss that because it works the other way sometimes. I don't really... I count FX when I think about a company's earnings power. Others do. I don't.
I know. I always have to decode all this. No, it's good. I assume people know, but no one's born knowing what FX is.
I think deregulation. I feel like that is something in their control, and that would be a benefit to many companies. So even Jamie Dimon said it on his call. Jamie Dimon, I think, is one of the greatest financial executives of the last century. Brian Moynihan also said it. He's the CEO of Bank America. He said on his call, the amount of paperwork and legal issues and rules that change and
and are so arcane in some ways, and also just, I don't know, whimsical, but that they have to comply with cost banks so much money. So if deregulation happens in many businesses, but let's choose banking because they are particularly regulated, then that will free up more money for making additional loans. It will make the banks more profitable, which makes them healthier.
And Jamie Dimon gave the example of if we could get rid of some of that regulation, we could make mortgages cheaper up to about 70 basis points cheaper, which matters a lot if you're a homeowner and you can get a mortgage 70 basis points. So lower than what you have now. That would be a very good thing. And that's something that's in their control. So we may see that.
Not too much deregulation, though.
We don't want to go through 2008. Right. So things, you know, it's a pendulum, right? We always go from one excess past what probably is the right amount to the other that is the wrong amount is too much. So there's a lot of room to come back and still have guardrails that we need. Absolutely.
Right. And we thought there would be a lot of mergers and investment banking activity. Not happening. One thing that is happening is the amount of trading revenue. So if you're the Goldman Sachs desk or JP Morgan's desk, the amount of volume we're doing trading is extraordinary, right? We've had several of the highest volume days ever just in the last two weeks. So they'll make money on that.
They'll make sort of extra money. But I don't want to pay a big multiple of earnings on what I think is extra short-term money that isn't going to be, a long-term trend of giant trading day, you know, commissions. I'm not, but in the short, very short term, it helps.
The financials started off really well and then really got hurt in this tariff, whatever you want to call it. I don't know. Do you have a word for it? Fuck, we can bleep it out.
Okay. That is the proper word for it, I think. Yeah. So... Hullabaloo? Hullabaloo. Kerfuffle. Kerfuffle.
Who doesn't love a kerfuffle? Perfect. Just because Jamie Dimon used the word kerfuffle.
Yeah. But he's extraordinarily good at his business. But normally when you see... Turmoil in the financial markets, banks, because they are levered, don't generally trade well. So Citibank didn't trade well. I mean, JP Morgan said it was a 280, went to 210. That's an enormous move. Goldman Sachs. Goldman Sachs. I mean, all of them. So they all kind of moved together.
There wasn't really a huge standout of one that... Morgan Stanley is a little bit of a different business model. They were down 30% too. So they all kind of got hit. Citi, I think Citi is a really interesting situation because It's super cheap. And you're in the hopefully near the last third or so of a multi-year effort by Jane Fraser. And I love that a woman is the CEO there. I love that.
And she has really remade that bank, clarified the lines of business and really gone after expenses. So some of the city's earnings and improvement is in her control and she's doing it. And that's been a really good thing to see. Just on this last earnings call, we started to really see it. And she feels it'll continue to happen in 2025 and 2026. So I love that earnings call.
And all of them also say, though, we don't know what the economy is going to bring. We don't know how people's You know, are we going to have more credit issues? Likely, right? Credit card non-performing, you know, people who are unable to pay back their credit card, that ratio will go up and that's going to cost the banks money. But they're not seeing it yet. I believe they will.
They believe they will. Delinquencies, yeah. Yes, delinquencies. But Citigroup has this other thing, which is within their own control, which is what I like a lot about it. And J.P. Morgan has the most extraordinary leadership. But, you know, Jamie B. Dinah will leave one day.
Yes. But I don't think that'll happen. So these big banks and I forget who are I think there's eight of them. There's a JP Morgan, the Citibank, Wells Fargo, names like that. The government will not let them fail. They are called SIFI banks, strategically important financial institutions, which basically means we cannot let them fail. Otherwise, the apocalypse is the financial apocalypse is here.
So as a result of getting that sort of protection that they also have a lot of this regulation that we talked about. But I really do believe the regulation has gone too far and they're way, way, way less levered than they were going into the financial crisis. The business, as I said, the guardrails are there and they're working. Yeah, we need a Goldilocks situation. Right, exactly.
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