Just as during the Great Moderation, buying financials has become the no-lose trade for any and all momo junkies. From their 'fortress' balance sheets (prone to total leveraged collapse at any moment from giant over-zealous trades and mismarking of assets [5]) to their 'can't lose' scenario analysis if rates rise because NIM will make them rich (aside from the fact that it won't [6]), bank stocks have been among the best performers in recent months (dramatically outperforming credit in the last few weeks). So we have a simple question. If things are so great... if the outlook so rosy... if the price-to-book so misvalued... why are the bank laying off people in 2013 at a rate almost as fast as they did in 2009?
Financial institutions are firing staff at almost the same rate in 2013 as they did in the immediate aftermath of Lehman!
[7]
which perhaps explains this divergence...
[8]
Chart: Bloomberg Briefs