The Financials are a Coiled Spring
There is no doubt that the entire financial group is heavily shorted, and very much hated. The Fed will do everything in its power to bailout any deficiencies that exist in the sector.
Unlike the 2000 NASDAQ situation, financial institutions are vital to the economy, and our nation could not survive if a prolonged crisis was allowed to continue.
In my opinion, the financial sector will be bailed out, and financial stocks will recover. This may not happen as quickly as you would like (yesterday), but it will happen over the next 12-24 months.
Today, the stock market rebounded after the Wall Street Journal reported Bank of America may buy Countrywide Financial (CFC), and Fed Chairman Ben Bernanke said that more interest rate cuts were on the way.
For the day;
DJIA +117.78 points to close at 12,853.09
SPX +11.20 points to close at 1,420.33
NASDAQ +13.97 points to close at 2,488.52
Now You Know... The Rest of the Story
Believe if you must that politicians work for the citizens who elect them. I wish I was naive enough to believe that.
Jeb Bush, former Governor of Florida, brother of the President, and son of former President GHW Bush was a paid consultant with Lehman Brothers. Lehman sold the State of Florida pension fund some SIV (structured investment vehicle) investments which could lose the State between $900 million to $2.3 billion dollars.
Former British Prime Minister Tony Blair joins JP Morgan as a senior advisor. Well thats a refreshing change, most US politicians join hedge funds.
No, You go ahead without us...
The Bank of England and European Central Bank decided to keep their benchmark rates unchanged saying that inflation was still their primary concern.
Despite some verbal arm twisting by Prime Minister Gordon Brown, the two Central Banks opted for doing the right for their citizens which is fight inflation, and maintain a strong currency.
