Troubled Assets Not Going Anywhere
Alexandra Zendrian, 08.19.09, 04:00 PM EDT

It looks like these assets are here for at least five years, which means caution when investing in the banking sector.

It’s recently been reported there are 294 U.S. banks with proportions of troubled assets at 90% or higher. This is despite the fact that the Troubled Asset Relief Program has been in effect since late 2008, at a cost of hundreds of billions of dollars. With that mind, it’s easy to imagine such assets remaining on bank balance sheets forever. OK, maybe "forever" is a stretch, but they sure aren’t going anywhere any time soon. In fact, our investment advisers foresee these assets troubling bank balance sheets for another five to 10 years.

What does that time frame mean for you? With uncertainty surrounding the banking sector and a lengthy run needed to cure the sick banks, it means to either stay away or approach with caution.

More…
http://www.forbes.com/2009/08/19/troubled-...bankruptcy.html