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Buy Banks? Not for more than a few days!

|Includes: SPY, Financial Select Sector SPDR ETF (XLF)

This morning on CNBC we had Dick Bove suggest buying banks, as Dick Bove seems always to suggest. His argument is that we now have certainty and the banks will find ways to circumvent regulation that will be coming down the pike. I get that and I think that is reasonable. However Dick Bove was somewhat contradictory in that he believes M3 is rapidly declining due to bank overcapitalization and therefore we are headed into a recession. Of course everyone seems to have their favorite statistic, I guess for Bove it is M3, but other stats like weekly ECRI leading index are pointing in the same direction. If you want to buy banks that makes some sense if you believe in a SHORT TERM bounce due to getting certainty out there relative to regulation, but if we are headed to a recession, you don't want to be holding financials which will drop faster than anything but cyclicals in that senario.

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Disclosure: No Positions