Was just reviewing the bank stocks. I feel smug about suggesting that Bank America was headed to a hat size when it traded at $14. Did I follow my advice? Nah. Short 100 shares? 1000? Nope. Put a $1000 into puts? Nada. Idiot.
I checked the most declined list and Bank of New York is down 6%. No wait, that’s $6!! This is a bank supposedly immune to the typical position losses and leveraged balance sheets associated with JP Morgan or Citi. State Street Bank, home of money market funds offered to institutions, lost $6 billion on its portfolio and is down 50%. Wells Fargo off 17%. Bet the Wachovia shareholders are delighted as must be Warren Buffett, WFC’s largest shareholder. There is a taking no prisoners atmosphere out there that is puking every bank stock in the world. If Bank of New York can decline 26% in a single day one might ask if anything is safe. Anything.
But fear begets opportunity. Over the next several days Obama’s pronouncements will compete with luke-warm corporate earnings reports. It remains to be seen which of these two camps will triumph enough to inspire traders to take ’em up.
