The credit crunch is over. The banks are back in fashion. It’s official.
For some at least. In the UK, resident basketcase Northern Rock is up again, about 26 per cent and still climbing fast, on the back of the stake building by one of the City’s star traders Jon Wood.
But no European bank can really top the come-back factor exhibited by the leader of the US pack. Goldman proved itself teflon in the credit squeeze, its stock falling about 40 per cent from its June high to the bottom of the August slump, before piling it all back on as it delivered knock-out third quarter numbers and even managed to rack up a profit from a rescue mission for one of its own hedge funds.
And on Tuesday, as financial surged after the release of upbeat minutes from the Fed, the bank closed at a new record high of $239.2 a share, completing its come-back from the August doldrums. The gradient on the recovery is the kind we’re more accustomed to seeing on a Shanghai listing.
Bespoke Investment Group last week noted, with chart right, that Goldman is fast becoming seen as the most appropriate barometer of the health of the overall US equity market, as opposed to a more traditional benchmarks such as General Electric.
Goldman is up 45 per cent since its low on August 15th.
As the Fast Money lot would have it: “IT’S LIKE IT NEVER HAPPENED.”