Portfolio Log-inBanks and Their On Going Ailments; Ignore Dimon; Media Troubles;Eco Data
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3/30/12
“Some of Wall Street’s biggest banks are bracing for fallout from a possible cut in their credit ratings.
Moody’s Investors Service, one of the two big ratings agencies, has said it will decide in mid-May whether to lower its ratings for 17 global financial companies. Morgan Stanley, which was hit hard in the financial crisis, appears to be the most vulnerable. Moody’s is threatening to cut the bank’s ratings by three notches, to a level that would be well below the rating of a rival like JPMorgan Chase. Bank of America and Citigroup may also fall to the same level as Morgan Stanley, but those two are helped by having higher-rated subsidiaries. (NY Times)”Until late last week, banks have rallied – they were hot. That rally has stalled out a bit as the credit downgrades loom in the not too distant future. I cleared out of banks earlier in the week when it became very evident that momentum was failing. $10 which had been an important level of support once upon a time for Bank of America is now strong resistance. I am watching banks for another entry point. While banks are supported by the distorting but powerful impact of funny money, Fed balance sheet refuge, Fed payments on excess reserves, accounting loopholes, etc., bullish plays in banking names are a matter if taking advantage of short term manipulations NOT that banks are truly recovered and solvent institutions – especially at the top of the banking pecking order.The other day CNBC sent out alerts that Jamie Dimon, the CEO of Chase – yes the bank encumbered with a 70 trillion dollar derivatives load, sees diminished chances for a double dip recession. If you think that MF’s Jon Corzine acted without motivational words from JP Morgan Chase – the mysterious recipient of billions in segregated MF Global funds (really not so mysterious since stealing is stealing), I’ve got a bridge in Brooklyn to sell you. I see Dimon’s credibility ranking in the zero range. I could hardly care what Dimon has to say about anything. While I am not sure of the effectiveness of Occupy Wall Street (coming back in full force in May), I can understand their motivation – especially when one considers the blatant confiscation of MF customer funds at the convenience of a NY money center bank named after a turn of the 20th century bully. Jamie jawboning the economy? Ha Ha. Pond scum, if it could speak, would be more substantive – not the top of the ladder Don of the banking cabal who has to win everytime and is full of chutzpah. Dimon and his ilk are not my faves. What can I say.
Enough venting on banks. When Moody’s cuts them, the group of bank stocks will probably rally in that usual go figure Wall Street kind of way. I could go down another road and wonder why we care what Moody’s has to say, or S&P, or Fitch for that matter.
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Gold – Range Bound with a slight upside bias.Crude – marking time. Geopolitics is the main driver for now.
Treasuries – notes and bonds at bubble like prices – tread cautiously there. So long as the FED remains in control, overbought will continue in perpetuity.Media Matters
Having worked in the broadcast business (tv on air and radio on air) from 1978 to the present this is great news. Mainstream cable “news” providers had a very bad ratings book over the winter. It’s not rocket science. Present real news, real issues, the truth and your audience will grow. Be a government/corporatist shill – audience drops. Even ratings winner Fox was not immune.
http://www.businessinsider.com/wait-did-cnn-just-lose-half-of-its-viewers-2012-3Just another day in the credit card world. Visa, MasterCard warn of security breach: report – NYPOST.com http://nyp.st/HotzP6 via @newyorkpostAlabama nightclub raises eyebrows with ‘Food Stamp Friday’ party http://dailycaller.com/2012/03/30/alabama-nightclub-raises-eyebrows-with-food-stamp-friday-party/
Data Clap Trap
Economic Reports: Personal Income for Feb. 0.2% vs. est. 0.4%, Personal Spending for Feb. 0.8% vs. est. 0.6%. Chicago Purchasing Mgrs. For March est. 63.0. Univ. of Michigan Confidence March (final) est. 74.5. NAPM Milwaukee for March est. 58.0.
Nothing new. Adjusted for inflation, income actually dropped. Financial repression continues on as usual. How does spending rise when income is down? Well, include inflation, and personal spending is overstated to begin with. But to account for why you see full parking lots at the mall – look no further than increased credit use and margin whittling sales by retailers.
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Author Jim Kingsland
Market commentator with focus on Gold and Silver after long broadcast career at FNN, Bloomberg, and Fox. #RandomHouse published author on PMs. Jim has also been involved in projects for CAC and Coinplex.
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