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Something's Not Right About This Rally

I agree with your point, only I would add that until the bottom fishing in the institutional side of the equation has worked itself out the credit markets will maintain their unusual spreads. Valuations continue to be worked through as financials are having to meet regulatory requirements. This presents opportunity for financials in relatively good condition to use to their advantage in consolidating the market. Until this occurs, consumer and commercial credit will remain tight. Lets face it, BOA should make more on their utilization of 2.8 Billion to purchase Countrywide than they could hope to make investing 2.8 Billion in consumer loans. And besides, the regulatory requirements are going to expose the weaker financial institutions and opportunities for significant ROI, in the meantime Joe Blow consumer/commercial customer has more time to expose their inability to remain solvent, further limiting credit markets exposure to risky loans when they do tighten the spreads.