Speculation has swarmed around the "Nationalization Word" and whether or not we could see large Financial Institutions such as Citi (C) and Bank of America (BAC) being taken over by the United States Government. The answer simply is "No" and that we will never see this take place. Newly appointed United States Secretary of Treasury, Timothy Geithner, says he has no interest in Nationalizing American banks and just wants to inject cash into them until they are financially stable and can go back to what banks do, loan money. As a result, Bank stocks long-term (5-7 years) down should be strategic long-term buys. Though some are current buys right now. For instance, Goldman Sachs (GS) is close to paying off all debt owed to the government in an effort to still be able to pay the ridiculous executive bonuses. Morgan Stanley (MS) and JPMorgan (JPM) also look stable at this time and have a low amount of debt which should allow them to return to normal practice sooner than thought. Others however such as Citi and Bank of America are in complete disarray. Bank of America acquired numerous amounts of debt with the acquisition of Country Wide and Citi has just been struggling ever since this crisis started. In the end however, I can see neither Citi nor Bank of America failing just because of their franchise name worldwide and the commitment they have received from the government. So you can rest easy knowing that Nationalization among the Financial Institutions is out of the question. In meantime look at Goldman, Morgan Stanley, and JPMorgan as strong buys. Wells Fargo is neutral as they took on debt with the Wachovia acquisition. Finally, i would avoid Bank of America and Citi currently just because their balances sheets are in such a mess and that there competitors are much stronger buys.
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