Fighting Yoda

If Asset Prices Are Dropping, Why Are Bank Stocks Rising?

Hype springs eternal - it is America after all. PPT team is hard at work, Fed and Treasury have the spigots open - PPIP, TALF, clunkers, 8K home credit, M2M,... Foolish investors never learn they always follow the piper - once again we hear the same stories- China, commodities - and people are going for it. Likely to see cash for appliance, cash for clothes, furniture - the possiblities are endless.

Yes banks will be hit even more in the next round with CMBSs, Fed is rapidly buying all the toxic stuff last count $666B, they will keep buying PPIP, TALF, and rest of the alphabet soup.
You of course can sell more homes and cars with cash rebates – earlier the manufacturers did it themselves - went bankrupt. Now Govt. is decided to get into the game – where will the Govt end up – of course in the very same place bankruptcy. Lot of states are already there- biggest California.

Not only these stimulus programs world over will end sometime soon, after that you have to pay for them- higher taxes, lower entitlements - we will see the other side of all this pretty soon.

BHO who was promising to balance the budget in 4 years is now guaranteeing quadrupling the deficit in 8 years. 1 Trillion stimulus 'unemployment will be kept under 8%', changes to 2 Trillion to keep the unemployment under 10% - so it goes.