stocknerd's  Instablog

The Irish politicans did the impossible, they agreed upon and signed into law a "good bank, bad bank" scenario. I'll spare you the details but those baaaaad loans and investments the banks (IRE and AIB) made are now in the lap, or I should say, balance sheet of another. Who cares who it is, it is just gone. Rubbish. You would think the PPS of the Irish banks would leave the train station headed for the moon, the stars and beyond. IRE was down 3% today, The PPS is now $10 from a high several weeks ago of $20. Go figure. This is the way I see it. Not hard to figure out. Banks, especially large national banks rise and fall with the country's economic health. Ireland is in intensive care. Not as bad as Iceland, but not far behind. The Celtic tiger is a sick tabby. There is no doubt, well, maybe doubt, that the Irish banks will once again rise to profit, but not anytime soon. 2010? Maybe. If you have spare money (here, money money) and a long time horizon, then buy and wait.

I've been following STEM since 2003. One look at STEM's chart since March lows and it is almost a flat line. The stock has done nutt'in honey. This stock, as all the other stem cell companies like ASTM GERN and KOOL (there are others) all trade on news and there has not been any great news. One would think since the Bush Dark Ages of NO STEM CELL research, and the light of the Obama administration, the PPS would rise. No such luck. What the problem is the investors and traders don't see any money rolling into stem cell medicine anytime soon----and they are right. Long term, stem cell companies are a buy. Long term? Can you say 3 to 5 years. If you have that long a timeline, go for it. Of course as soon as these companies look like they can make money they will be bought. 

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The Irish government will start to debate 16th of September on their bailout. They have to borrow the money from someplace, damn downside of a collective Euro is you can't willy-nilly print money. Don't look for a magic, instant solution. The Irish banks, like the American banks depend on real estate market forces and the power of the consumer to buy things. Believe it or not the Irish borrowed more money (per capita) than the Americans and their economy will take longer to recover. The "Irish solution" should pop the banks higher UNLESS the Irish politicians, grand talker all of them, talk this problem for weeks. IRE is a short term bubble, the PPS is way up, so traders, a flaky scared lot to the last man and woman, will sell if there is any hitch in the Irish bank solution. Take profits, why worry.  

This is the way the Irish banks work...they don't. They are waiting for the Irish government to: borrow money from EU and then the government promises to create a "good bank, bad bank" system. So far the Irish government has not borrowed the money nor released details on what a GB, BB looks like. The PPS of IRE and AIB are up, rising on the coat ails of the American and world banking systems. Once the decision and money is in the hands of the Irish politicans, don't worry you will know and have plenty of time----the Irish love to talk----then they will make a decision. Look for PPS to go wild during the process. If I owned either of the two bank stocks I would take profits. Rule 1: Profits, any profits, are good.
Rule 2: Never get greedy.