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  • Three Ring Circus 0 comments
    Jan 27, 2010 11:10 AM | about stocks: C, WFC, BAC, JPM, AIG
    What a day in the market! This morning Treasury Secretary Tim Geithner and former Treasury Secretary Hank Paulson will be on the hot seat regarding the bailout of American International Group (NYSE:AIG). The members on Capital Hill are wondering and asking why AIG was bailed out? The perception from many in Washington was that AIG was bailed out in order to keep Goldman Sachs (NYSE:GS) solvent as they paid Goldman Sachs back 100 cents on the dollar while the American tax payer paid the bill again. This hearing should be something to see today, even if nothing else comes from it.

    Later this afternoon the Federal Reserve Bank will announce the Fed funds rate (overnight borrowing rate from the Federal Reserve Bank to the large major banks) and their opinion on the condition of the economy. Currently the overnight lending rate is at zero. This statement will be released at 2:15 pm EST and is usually a market moving event.

    This evening at 9:00 pm EST President Obama will give his “State of the Union” address. One can only wonder if he will rescind or revise his recent comments about the banks that are too big to fail. He recently made a speech that implied he would reinstall a rule similar to the former Glass Steagall Act of 1933. Remember this rule was removed during the Clinton administration. The Glass Steagall Act of 1933 stated that banks could not invest or engage in investment banking activities and authorized deposit insurance. During the crisis in 2008 all of the major banks such as J.P. Morgan (NYSE:JPM), Citigroup (NYSE:C), Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), and countless others have and still are engaged in hedge funds, proprietary trading, insurance products, and other investment vehicles prohibited in the original Glass Steagall Act of 1933.

    This is certainly going to be a fun day on Wall Street. The markets have been weak since mid January and remain under pressure. However, technically speaking many stocks and indexes are near or at support in the near term. Enjoy the show as it should be quite entertaining.

    Nicholas Santiago,
    Chief Market Strategist
    InTheMoneyStocks.com




    Stocks: C, WFC, BAC, JPM, AIG
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