Monday, March 30, 2009

My Big Call; Either Spectacularly Correct Or (Possibly) Devastatingly Wrong

I don't pretend that anyone besides me reads these scribblings. I use it to crystallize my thoughts; augment my memory (Englebart would be proud!); keep my mind as sharp as possible; plus, I find it entertaining. That stated, here's the thing. I agree with some I read that today's market sell-off is due in large part because of Geithner's warning that banks may need to raise even more capital. This kind of rhetoric has brought back the fears and uncertainty for U.S. financial institutions. I'm just not sure I buy that. I have doubts about the idea. Geithner has been on the wrong side of this issue along with FASB and the SEC for over two years now. On Thursday, possibly still reeling from the massive celebration of the 44 years that have passed since my birth, we finally will (probably - we'd better...) receive new regulation that will allow the banks to start to heal. Investors will have to endure three more days of uncertainty, but come April 2nd, these stocks, I think, will resume their uphill climb toward prices that I think will eventually reach historical norms. This past rally off of the bottom of 3/6 (I think it was 3/6....) had everything to do with hopes for new mark to market rules and the subsequent sell-off is being caused by last minute fears that FASB won't get the job done.

I almost hate to put this out there; for fear of looking mighty foolish later on; but I'm as confident as I can be (and you know yourself, Mr. B) that FASB has gotten the message - especially politically.....

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