User 290548

Couldn't even wait until Friday: In the biggest collapse of 2009, regulators seize Florida thrift BankUnited, a failure which could cost the FDIC $4.9B. For the current crisis, only IndyMac's failure has been bigger. (table: banks gone bust)

Hilarious. Govt. workers can't work on Memorial Day weekend, so it happens Thursday.

Who Is Buying Financials?

Remember Pandit did this back in mid-November when C was at $9 and change.

Banking on a Rally for Quick Profits

I think you may be a day late on this trade. You would have made quick money had you bought the long at the end of the day Tuesday. Now I only think your trade works if Tuesday marks a short term bottom, which I don't think is the case, but I could be wrong.

Faltering Financials Forecast Continuing Failure for Stocks

I'm really surprised that the author did not include a $BKX:$SPX chart. This one chart sums up the whole situation. The bear rally is over and the financials are going to take everyone else down with them.

Fundamentals Remain Negative This Week

There has been a real disconnect between the terrible news coming out each day and the stock market continuing to rally. I understand there are bear rallys and that we declined alot over a short period without one, but I didn't expect that the rally would manifest itself by the market rising on bad news. That can only persist for so long. I do notice that bullish percentages across the three indexes ($BPSPX, $BPINDU, $BPCOMPQ) appear to be on the verge of crossing negatively on a 5 day EMA basis, which is bearish.

The other disconnect that is persisting is the credit market/equity market divergence. Corporate spreads, cds, etc. are wide while the stock market has rallied. The credit markets worsened on the bad news that sent the stock market upwards. That usually resolves itself in the favor of the credit markets, at least recently.

I guess the critical question is, when will the bear rally end? What will push the market past the bullishness and end all the long-only managers coming on TV and announcing the the bottom is in and that everyone should go buys stocks.

The Credit Spreads Blow-Up

The only misleading thing about this chart is that today is not 1990 or 2003. The dashed line on the right might still be climbing going forward unitl a market bottom is reached.

3 Scenarios for This Market: The Good, the Bad and the Ugly

For the "Dow Jones Bear Markets" chart, 7 of the 8 completed bear markets on the list happened in the 1940's and prior. I am not sure this is a very good sample to compare to. Also, I think the fact that the depression started off with a fall of 49% in its first two months makes it seem less similar to the current situation.

3 Scenarios for This Market: The Good, the Bad and the Ugly

A complementary article over on FT Alphaville with a more global perspective:
ftalphaville.ft.com/bl.../

"Recessions preceeded by a financial crisis tend to be deeper and longer than others."

"The average peak-to-trough fall following a banking crisis is 55 per cent, in real terms."