Bank Stock Portfolio Manager Tom Brown Talks His Book On Bloomberg This Morning

I happened to catch bank sector portfolio manager and long-ago bank stock analyst Tom Brown's appearance on Bloomberg television this morning. The occasion was apparently yesterday's Chase earnings release.

Listening to/watching Brown was fascinating, in that he was questioned, and answered, as if he were simply a bank stock analyst, as he once was.

But, in reality, the entire episode was Bloomberg's way of doing bank stock portfolio manager Tom Brown a big, big favor, letting him talk his book without advertising it.

For example, Brown kept downplaying the capital inadequacy of the big four US banks- BofA, Chase, Citi and WellsFargo. He continually claimed that they have "til 2017" to reach then-required capital levels, and would do so with so much extra capital that they'll 'have to buy back stock' with the surplus.

Then he decried those who would worry that Chase used significant loan loss reserves to boost this past quarter's profit.

Brown also excelled at turning the anchors' questions to topics he wanted to highlight, such as his forecast that all the major banks would be growing loans and business volumes in 2012, thus making now a great time to buy before the profits roll in.

I've been following Brown's comments on Bloomberg for a few months now, and the last word you'd use to describe them is objective.

The truth is, Brown has to have a reason to push owning bank stocks, so no news is ever bad. Good earnings mean jump on the bandwagon, while lackluster results mean buy before performance improves.

Never mind that Brown evidently piled into BofA before its shares plummeted on higher capital concerns and the expensive mortgage loan distribution settlement it announced recently.

No, the bank sector is just wildly attractive, in Brown's view. No chance that a faltering economy could cause renewed credit problems, slow loan growth and generally stagnant performance.

As I listened to him predict how much profitable growth would occur at the four large banks from now until 2017, I considered how much trouble those same banks had managed to run into just from 2006-08. A fraction of the timeframe over which Brown is forecasting such bountiful banking profits.

But I'm sure such losses like those recent mortgage problems will never recur, will they Tom?