Thursday, April 9, 2009

The Fantasy Economy of US Banking

I am not going to rant and rave about how the corrupt, insolvent banksters who are in control of our economy goosed the market today by having Wells Fargo (WFC) jump the gun and pre-announce their outstanding earnings - some $3 billion worth - less than 2 weeks before their actual earnings date.

The bank announced prior to the market opening, which jump-started the futures and set the tone for the trading, with all of the major indices gapping up more than 2$ at the open.

No, I'm not going to rant about how utterly without integrity are the leaders of our country and the business community. I'm just going to tell you that I closed all of my positions today and will be out of this market for the foreseeable future.

Dow 8,083.38, +246.27 (3.14%)
NASDAQ 1,652.54, +61.88 (3.89%)
S&P 500 856.56, +31.40 (3.81%)
NYSE Composite 5,376.44, +200.03 (3.86%)

It should be noted that while Wells Fargo was up 31%, they were outdone by Bank of America, which posted a 35% gain on the day. Other Dow components in the financial sector with outsize gains were American Express (AXP), up 20%, JP Morgan Chase, up 19%, and Citigroup, up a mere 12%. Bear in mind that all of these companies were the beneficiaries of taxpayer bailout money and other favorable loan terms from the Federal Reserve and Treasury. Ben Bernanke and Tim Geithner are smiling with riches tonight. Welcome to the fantasy economy.

On the day, the spill-over from the banking boom sent advancers solidly ahead of declining issues, 5586-1033. However, new lows remained ahead of new highs, 80-38. Trading volume was quiet strong.

NYSE Volume 1,835,800,000
NASDAQ Volume 2,179,931,000

Over in the commodity pits, oil was up $2.86, to $52.24. Gold continued to stall, losing $2.60, to $883.30. Silver also fell, but only by a penny, to $12.33.

Tomorrow being Good Friday, the markets are taking the day off. While the government runs not only record deficits, but enormous ones, unemployment continues to rise unabated and the real estate market continues to struggle, all's well on Wall Street, where criminals run the banks and brokerages with money supplied by you and me.

Happy Easter. I hope you find some gold inside your eggs.

No comments: