rogerk2

Cramer's Mad Money - We Lost a Good Man (5/8/09)

The problem is, Geithner and the rest of them CREATED the financial meltdown, by lax oversight and ineffective (or no) regulation. Hiring these same crooks to clean up their mess is adding insult to injury.

Cramer's job is to get eyeballs for CNBC. More people watch the show if he's pitching stocks to go up, not down. His job is to make people think "there's always a bull market out there some where" so they'll keep watching his show (and the advertisements that support CNBC).

A Stress Test Shocker: BofA Needs $35 Billion

Seems to me the whole premise of rating a bank's future health on shareholder assets is flawed. A very large percentage of the bank's current "float" shareholders are fast-money traders. If the bank's share price starts falling, there will be a quick landslide of hedge funds and other speculators heading for the exits ... and loading on shorts.

How many pension funds, college endowment funds, mutual funds, stayed long the banks all the way down? If they did, their shares are worth pennies on the dollar. How much of the new money going into banks this year so far has come from these big funds? Not a lot yet, I suspect. Most of the new money is speculation ... and it'll be gone in a flash at the first whiff of bad news.

If a bank is forced to raise $10B more shareholder assets, and $10B worth of speculators sell the news, doesn't that mean the bank has to find $20B instead? That's why the spec players will dump all at once and immediately go short.