"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

Stocks rose sharply today as crude oil prices continued to drop, and the news coming out of the financial sector is not as dire as short sellers and stock manipulators want you to believe.

Yesterday's rally was ignited when Wells Fargo announced better-than-expected earnings, and increased its dividend to boot. Today, JP Morgan, Huntington Bank and Comerica also reported results that beat projections.

Initial jobless claims for the week ended July 12 were reported up 366,000 v. estimated 380,000 and last week's revised 348,000. June housing starts were reported up +11.5% v. expected 1.5% decline. On the other hand, the July Philly Fed index, a measure of mid-Atlantic factory activity, in lower than expected.

The summer and election year rally is now underway. As long as oil prices continue to fall (as I expect they will) stock prices will continue to climb. Lower oil prices are great for the economy, particularly consumer discretionary and financial stocks.

The Rest of the Story

Brokerage firms are at it again. This morning a team of 10 regulators raided the securities headquarters in of Wachovia in St. Louis (formerly A.G. Edwards) on the companies sales and marketing of auction-rate securities to clients.

Subpoenas were handed down after hundreds of investors complained they couldn't access their money.

Folks, lets make this simple. If you absolutely must deal with a brokerage firm, don't let them sell you anything other than a stock, (real) bond, mutual fund, or cd.

Lawmakers Want to Crush Short Sellers & Hedge Funds

On Wednesday, legislation was introduced by Rep. Gary Ackerman (D-NY) that would reinstate a depression -era rule on short selling that was changed in mid-2007. The old rule said that short sellers could only short on an uptick (the uptick rule). This prevented short sellers from selling as the price of a stock was falling.

By reinstating the old rule, short sellers can only short if a buyer order proceeds an order to short. Why the rule was changed in 2007 is another one of those strange occurrences that took place under the Bush appointed SEC.

SEC Launches Stock Manipulation Probe

All I have to say is, "what took so long?". Today, the SEC said it would "immediately" launch a probe into the spreading of false information to manipulate stock prices. Huh, I guess some popular investment TV shows will need to be shut down.

As Gene Simmons (KISS) said in his book;

"People will hold you up for money, but those same people, if they were loaded (rich), might not resort to holding a gun in front of your face".

I wonder if he was describing Wall Street?