JasonC

Bank Stocks Down 11.56% Yesterday

The plug protection team bought to squeeze the shorts Thursday and Friday, to goose the settlement price on options as high as possible for Friday expiration. As soon as they were past that, they sold. That is all.

Also, the bailout was believable on Friday, but Monday we got to see what the Dems plan to do with it. And the answer is wreck it thoroughly with insane unworkable class warfare riders. So people basically decided on Monday that the bailout was a sham and either wasn't going to happen or wasn't going to help.

People are still uncertain. But until they see a deal in ink they aren't going to believe this braintrust isn't going to screw the pooch yet again. And if the deal is "oh and you have to give us the bank, and make mortgages credit card loans and never foreclose", and such utter rot, then the government can spend as much as it likes and it won't make the slightest difference. Nobody who isn't already bankrupt will take such terms, so it won't save anything, anyway.

The whole point of the Paulson plan was to get the bad paper *out* of the banking system. Make the terms into "if and only if you've failed and want to be nationalized and turned into arms of HUD", then nobody will sell to them and it won't have the slightest effect.

These people are not fit to run a McDonalds...