Too Big to Fail
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Too Big to Fail

13.3%
2.6%
0.3%

Bye-Bye, Bad Loans, Hello Big Bank Stocks

Sometimes, size really does matter. During the financial crisis the US government declared that 19 financial institutions were systemically important, or “too big to fail.” And they backed it up with the $700B Troubled Assets Relief Program (TARP). As a result, those 19 institutions can now benefit from a view that they have an implicit US Government guarantee. That perception lowers their risk profile and borrowing costs, delivering an immediate implied subsidy of as much as $83 billion a year.[1] The six largest banks control 67% of all U.S. banking assets, and Bank of America accounted for about a third of all business loans by itself last year. If these institutions were “too big to fail” back in 2008, then now they may be “too colossal to collapse.” And that could be a gigantic advantage. See more
13.3%
2.6%
0.3%
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Motif Index 1 YR Return
Too Big to Fail Benchmark
With this Motif, you can buy the following basket of stocks for just $9.95:
Weight Segment & Stocks Symbol 1 MO / 1 YR Return
51.5% Retail Banks 10.7%
19.5% Wells Fargo & Co. WFC 14.4%
12.0% U.S. Bancorp USB 7.3%
6.4% Capital One Financial Corp. COF 1.5%
5.6% PNC Financial Services PNC 20.2%
4.0% BB&T Corporation BBT 10.8%
1.0% SunTrust Banks Inc. STI 17.2%
1.0% Regions Financial Corp. RF 4.3%
1.0% Fifth Third Bancorp FITB 3.4%
1.0% KeyCorp KEY 10.9%
30.3% Financial Conglomerates 12.5%
16.2% JP Morgan Chase & Co. JPM 19.1%
5.4% American Express Co. AXP 17.0%
5.3% Bank of America Corp. BAC 18.0%
3.5% Citigroup Inc. C 18.3%
10.3% Investment Banks 19.7%
7.2% The Goldman Sachs Group Inc. GS 19.0%
3.1% Morgan Stanley MS 21.4%
5.9% Custodian Banks 11.2%
3.6% The Bank of New York Mellon Corp. BK 12.6%
2.3% State Street Corp. STT 9.0%
2.0% Insurance Providers 13.7%
1.0% American International Group Inc. AIG 20.4%
1.0% MetLife Inc. MET 7.0%