This market can't handle a Pelosi-Geithner appearance on top of a hearing about how bogus the SEC is. We just lose all credibility as a country to invest in.
Today's revelations about Bank of America's and Wells Fargo's business-as-usual -- meaning outrageous -- activities (given that they received TARP money) showed how we are not going to be able to transcend the bank stock selloff for more than a day or two.
We have to recognize that this administration will put the execs in the cross hairs and make those who are still doing well and showing it cut back and go into hiding.
Of course, it is hard to rally banks when we have no idea whether they will EVEN EXIST next Wednesday. The planless (perhaps clueless) administration -- the one that seemed to think it had figured out what to do -- is truly hurting this market. I don't know about you, but when I hear pay limits for execs -- even if they make sense -- I hear profit limits on investors. I also think that Geithner might leak, at any time, to one of his myriad fave reporters that he will CRUSH the banks' preferreds, not just the common stock. I say to that: WE WILL BE DOWN AT LEAST 10% IF THAT'S THE PLAN.
Now we feel we are back in the bad old days of weekends waiting for Bear and Lehman and Wachovia. Maybe Geithner likes drama. Funny how everyone but the media is coming around to the view that perhaps Geithner was ACTUALLY INVOLVED with the past ... a past he helped create!
It is too bad. The SKF linkage is bringing down Goldman Sachs along with Bank of America. Wells takes down Morgan Stanley. Why not? They are all in the index, which is much more powerful than the individual stocks.
That's the pattern that has defeated a lot of rallies. I am reluctant to say that this time will be different.