Tuesday, August 09, 2011

Fear Returns To U.S. Banks

We have called every major move in our banking system since starting this blog.  That includes peaks and bottoms; the 2007 peak, the 2008 implosion, the 2009 rally and the 2011 collapse. 

Our warning in the first quarter of this year that we were again bearish on banks and our numerous follow up posts on that topic has indeed come to pass.  The banking index has imploded in the last few weeks.   The banking index has now erased over two years of gains and is back to the same level as April of 2009.  (And if we put Goldman Sachs in there, it would be down even more.  Goldman is down again today on a substantial banking index rally.  Remember our comments about Goldman’s future. )  That type of accuracy  can’t and won’t go on forever but it does prove a point that the status quo’s remarks that no one could predict any of what has happened is simply a reflection of complete and systemic incompetence.  

Ain’t no functioning market-based meritocracy dynamics in this country’s financial system.  It’s instead the who’s who of stupid.  A nobody writing a free niche blog in his spare time was right more often than the Federal Reserve, any economist or the highest paid research teams on Wall Street.  That should tell you listening to anything out of anything Wall Street or bankers say is akin to signing your own death certificate. 

What I want you to take away from this is the weak underbelly that exists within the status quo.   If reform and competition was returned to the American economy, every major corporation that holds substantial market share in every industry would eventually become completely irrelevant.  (Do you really want to own their equity shares?  Seriously.)  The corporate state is successful not because of a meritocracy or because they are qualified but because they are corrupt and/or the system is rigged.  And, how if real economic reform was instituted, that system of corruption and those who are now viewed as masters of the universe would collapse.  We’ll put up a few detailed posts on how this is already happening in the next six months.  I’ll probably get one up within the next few weeks.  It just depends on how much time I have.

Over two years of losses now exist in the banking index.  This after these bankster criminals received the largest corporate bailout of systemic incompetence in American history.  And your little old grandma living just above the poverty line paid for that bailout.   

Title link here.

posted by TimingLogic at 11:39 AM