Expect Microsoft, American Express and Amazon to Hurt

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Includes: DIA, SPY
by: Craig Brown

Let me start by disclosing that I have put options on Microsoft (NASDAQ:MSFT) and American Express (NYSE:AXP). Not a big deal as I bought them a while ago and they are nearly worthless. They will improve on Friday, but I ain't retiring on them any time soon. Still, I feel a bit justified in my picks given that they are all showing poorer quarterly profits than most anticipated and are down around 5-6%.

And You Know We are Out of the Woods When . . .

When Swiss banks run out of room for gold bullion, we know everyone thinks equities are the right place for their money, that inflation is not a risk and that everything is honky dory. Need I say more...

Bad News - Banks May Need to Come Clean (Probably NOT!!)

As this link explains the FASB is considering rules to make banks record financial assets at fair value. Now this would be disastrous for many banks recording assets at fantasy values (a reason PIPP is not working) and the last thing the banks (or Administration) wants is them being transparent (at least at the moment). FASB has already delayed some transparency plans for these very reasons and expect them to do so again. Seriously folks, the last thing this economy needs is financial institutions telling the truth. We would rather, much rather, invest based upon make believe. My daughter likes fairy tales too.

CREmated Update

I posted yesterday briefly on commercial real estate ((CRE)) going down the tubes. Just providing a couple of links on the same subject.

Did I mention that Calculated Risk is my favorite site on real estate?

Disclosures: Put options on MSFT and AXP.