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Friday October 30, 2009

DrStockPick.com Article

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Too big to fail, is still heavy in the derivative market, and primed for a gigantic collapse.

Congress needs a chimney sweep to clean the soot from the smoke they’ve been blowing. Our do nothing congress; well we can’t really say do nothing, they did bail out the banks, and they have raised more money for themselves this session from Insurance, health care and bank lobbyists than in any other one year period, and the year isn’t even over. Now they are spreading the word, the gospel of Obama, it’s time to

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Woohoo!…U.S. stocks racked up their biggest quarterly advance since 1998! The Standard & Poor’s 500 Index soared more than 15% between March 31 and June 30 - lifting its year-to-date performance marginally into the black, and breaking a streak of six consecutive quarterly declines for the S&P 500, the longest since 1970.

This champagne-cork-popping performance obscures a few trends that should be worrisome to the celebrants. First, the S&P 500 has gained no ground whatsoever since May 8, the first trading day after the Federal Reserve triumphantly announced the results of its banking sector “stress tests.” Second, the BKX Index of financial stocks has DROPPED more than 16% since May 8. (As we have noted in prior editions of the Rude Awakening, the finance sector has been leading the overall stock market - both to the upside and downside - for the better part of four years.

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Gold price action on Monday looked similar to Friday’s. The bottom for gold in the Far East came shortly after 3:00 p.m. in Hong Kong…rose until shortly after London opened, declined a couple of bucks…but once the London a.m. gold fix was in [10:30 a.m. in London...5:30 a.m. in New York], gold rose to its high of the day shortly after 11:00 a.m. This high [once again over $940] lasted until 9:00 a.m. in New York, shortly after the Comex opened…then it got taken down eight bucks to its low of the day at 10:00 a.m. in New York…which just happens to be the London p.m. fix…3:00 p.m. over there.

From that point it rose right into the Comex close…and was taken down and closed below $940 once again in the electronic market.

Silver’s chart pattern was virtually identical to gold’s.

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For Immediate Release

Chicago, IL - June 30, 2009 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: J.P. Morgan (JPM), Bank of America (BAC), Citigroup (C), Wells Fargo (WFC) and Omnicell Inc. (OMCL).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday's Analyst Blog:

Supreme Court Rules Against Banks

In a surprising 5-4 vote, the Supreme Court ruled that national banks are still subject to the laws of the states they operate in. What made the ruling unusual is that Justice Scalia wrote the opinion and the other four conservative

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In a surprising 5-4 vote, the Supreme Court ruled that national banks are still subject to the laws of the states they operate in. What made the ruling unusual is that Justice Scalia wrote the opinion and the other four conservative judges were in dissent (Roberts, Thomas, Alito and the normal swing vote Kennedy). The ruling overturned an appeals court ruling that said that state attorney generals cannot investigate banks if they operate in more than one state. The case in question involved the enforcement of fair lending laws in N.Y. State, specifically allegations that some banks were charging minorities higher interest rates. Instead, even though these are state laws, the appeals court had said that only the Office of the Comptroller of the Currency (OCC) had the power to investigate. In practice, this means that the laws were null and void, since the OCC has ...

Gold’s low price for the day came early in Hong Kong trading on Thursday morning. From there, and in fits and starts, the gold price managed to work its way slowly higher later in the Hong Kong afternoon…and into morning trading in London. But the real fireworks didn’t get started until 8:00 a.m. Eastern time…shortly before the Comex opened for trading…and at 9:00 a.m. [sharp], gold was up $15 before the usual not-for-profit seller showed up. After that, every rally attempt got firmly sold off, so that by the end of electronic trading at 5:15 in New York yesterday…gold was only up about six bucks.

Silver’s moves were even more dramatic…and it was obvious that someone was there to make sure that its price was not allowed to go vertical…which it gave clear indications of doing a couple of times. The first time [along with gold] was 9:00 a.m. [sharp] in

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The proposed reform of the banking sector is very large and multi-faceted, and will be the subject of many blog posts over then next few months.

However, at yesterday's congressional hearings the topic that drew the most fire was the idea of making the Fed the "systemic risk regulator." Clearly there is a need for such a regulator, so in my mind, doing nothing would be the worst possible option.

Then again, is putting the Fed in charge the right answer? As I see it there are four possible answers.

1) Put the Fed in charge 2) Form a new agency with those powers 3) Give those powers to another existing agency, for example the FDIC or the Comptroller of the Currency Have a committee of regulators do the jobAs Sen. Chris Dodd put it, giving these ...

President Obama "unveiled" his regulatory reform plan today. Most of the details of the plan had already been revealed earlier and the "near-final" draft was released by the Administration last evening.

The administration has focused on five key areas for reform, which we have highlighted below along with the important actions proposed in those areas:

1) Promoting Robust Supervision and Regulation

Raising capital and liquidity requirements Supervision by the Fed for all "too big to fail" firms Establishing a council of regulators for better coordination New National Supervisor to supervise all federally chartered banks Registration of hedge funds with the SEC Enhanced oversight of insurers2) Establish Comprehensive Regulation and Supervision of Financial Markets Enhanced regulation of securitization markets Stronger regulation of credit-rating agencies ...

President Obama "unveiled" his regulatory reform plan today. Most of the details of the plan had already been revealed earlier and the "near-final" draft was released by the Administration last evening.

The administration has focused on five key areas for reform, which we have highlighted below along with the important actions proposed in those areas:

1) Promoting Robust Supervision and Regulation

Raising capital and liquidity requirements Supervision by the Fed for all "too big to fail" firms Establishing a council of regulators for better coordination New National Supervisor to supervise all federally chartered banks Registration of hedge funds with the SEC Enhanced oversight of insurers2) Establish Comprehensive Regulation and Supervision of Financial Markets Enhanced regulation of securitization markets Stronger regulation of credit-rating agencies ...

By Shah Gilani
Contributing Editor
Money Morning

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To read a related story on how the long-term dismantling of U.S. banking regulations set …