Highlights include JP Morgan Chase & Co. (JPM), Citigroup Inc. (C) and Bank of America Corp. (BAC).Apparently there is no limit to the arrogance and sense of entitlement at the nation's largest banks. From today's Wall Street Journal we get this:"Some banks are prodding the government to let them use public money to help buy troubled assets from the banks themselves. Banking trade groups are lobbying the Federal Deposit Insurance Corp. (FDIC) for permission to bid on the same assets that the banks would put up for sale as part of the government's Public Private Investment Program (PPIP). PPIP was hatched by the Obama Administration as a way for banks to sell hard-to-value loans and securities to private investors, who would get financial aid as an enticement to help them unclog bank balance sheets."Let's recap a bit. Banks make a ton ...

After market close, the Federal Reserve released its Supervisory Capital Assessment Program: Overview of Result (aka the overdue and over leaked results of the "Stress Test"). Clearly there is something for everyone in the results. Of the 19 financial institutions test, 10 were found to be in potential need of additional capital under the more adverse scenario. While we continue to disagree with the modification of the mark-to-market accounting rules as a measure to financial engineer reality, the effects did improve the potential scenarios on paper.    Of the $74.6 billion that will be needed to be raised, $64.6 billion or 86.6% was attributed to four institutions: Bank of America (BAC), Wells Fargo (WFC), GMAC LLC (GMAC), and Citigroup (C). It's interesting that the worst was leaked, perhaps to moderate the market's reaction.  We continue to fret

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Highlights include American International Group, Inc. (AIG), Citigroup, Inc. (C), JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC) and Bank of America Corp. (BAC).This morning, Fed Chairman Ben Bernanke gave a speech on the topic of financial regulation and the lessons learned from the recent disaster. Here is a key section of the speech, with my thoughts interspersed: 

"Looking forward, I believe a more macroprudential approach to supervision--one that supplements the supervision of individual institutions to address risks to the financial system as a whole--could help to enhance overall financial stability. Our regulatory system must include the capacity to monitor, assess, and, if necessary, address potential systemic risks within the financial system. Elements of a macroprudential agenda include:   

"monitoring large or rapidly increasing exposures--such as to subprime mortgages--across firms and markets, rather than only at the level of individual firms ...

Highlights include Goldman Sachs Group, Inc. (GS), JP Morgan Chase & Co., Inc. (JPM), Citigroup, Inc. (C) and Bank of America Corp. (BAC).Yesterday, after market close, Goldman Sachs Group, Inc. (GS) reported 1Q09 earnings of $1.66 billion or $3.39 a share, up from $1.51 billion, or $3.23 a share a year earlier. The results were way ahead of consensus estimates of a profit of $1.64 per share. A conference call to discuss the results was held this morning.Higher-than-expected profit was mainly due to strong trading revenue. Of the first quarter net revenues of $9.4 billion, $6.6 billion (34% higher than its previous record) was the contribution from the company's fixed-income, currency and commodities (FICC) group. High volatility (benefiting the Treasury markets and the Dollar), wide spreads in fixed income and reduced competition in the markets were the main reasons for ...

Notes from the Investment Underground April 9, 2009 Palermo Viejo, Buenos Aires, Argentina

Why you should invest in pipeline companies… Wither Geither’s stress test results? Congress vs the Treasury… Check out of USA Inc with these four BRIC EFTs… How to survive the “Great Money Famine of 2009”… Three questions for Barney Frank… Congressional panel: Liquidate banks, fire top execs… PPIP FLOP… Geithner’s latest Orwellian manoeuvre… And more!

*** We’ve added a new section to Notes. It’s called “Must Reads” and it’s basically a list of the day’s must read articles on money-making and the markets. It’s at the very bottom of the issue. Tell us what you think: info@contrarianprofits.com. Don’t be shy. We’ve got thick skins.

*** We love DailyWealth. It’s quite possibly the single best free source of contrarian money-making ideas out there (apart from Notes, of course).

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Highlights include American International Group, Inc. (AIG), JPMorgan Chase & Co. (JPM), Citigroup Inc. (C) and Bank of America Corp. (BAC).Wells Fargo & Co., Inc. (WFC) delivered a pleasant surprise to the markets this morning by announcing that it expects a net income of $3 billion, or $0.55 per share, for 1Q09, as against estimates of earnings of $0.23 cents per share. Revenue projection for the quarter at $20.0 billion was also ahead of the estimates of $18.98 billion. The Company will report its financial results on April 22, 2009.The bank said that the revenue received a boost from exceptionally strong mortgage banking results and strong capital market activities. It appears that the bank benefited from a larger share in the mortgage markets after acquiring Wachovia, and also from the demise of some smaller players....

Tuesday afternoon’s closing bell on Wall Street didn’t just signal the end of the trading day. It also rang in the start of first-quarter earnings season.

Alcoa (NYSE: AA) had the ominous and unenviable task of being the first of the Dow Industrials to step up to the plate. And like a tubby first baseman who’s spent the winter off-season shoveling down junk food, Alcoa swung and missed. Badly.

Already waddling around with debts of more than $10.5 billion, America’s largest aluminum producer reported further loss of half a billion dollars for the quarter (59 cents per share), as sales plunged by 41%. As a sign of how hard the recession has bitten the company, it compared to net income of $303 million (37 cents per share) in Q1 2008. It was the company’s first consecutive quarterly losses since March 1994.

The news wasn’t a surprise. As the recession squashes aluminum

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Notes from the Investment Underground San Telmo, Buenos Aires, Argentina

April 6, 2009

Why the economy is still heading for a cliff… All the king’s horses and all the king’s men can’t put the banks back together again… The madness of Sheila Bair… The government lies over banks are paper thin… Infighting at the Treasury… Why Citi’s CEO should go… Banks plunge… “Fake dividend” strategy exposed… Can mark-to-model save them? Selling OTM calls against your financial stocks… What happened on March 9… And more!

*** You’re reading this newsletter because you don’t believe the cheerleaders in Washington and in the mainstream press. You know it’s safer to know the truth about the economy than to believe the hype and the lies and the false optimism. You know that real money-making ideas can’t be found on CNN and

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Video footage this week centered around the G20 meeting, the decision to relax mark-to-market accounting rules, the Detroit drama, the Geithner plan to deal with toxic assets, and the staying power of the nascent stock market rally. This post features some of the more interesting clips. Please visit my website (by clicking on the heading above) for the full article, as well as other interesting investment snippets.

While we remain negative over all, we would note our outlook has begun to improve a bit around the edges given the comparatively limited downside potential remaining for certain entities.

The financial markets and financial stocks in particular have experienced a significant percentage-point lift following the pending modification to the mark-to-market accounting rules (an artificial adjustment to capital) and the announcement for the Public Private Investment Partnership (PPIP) -- though we would point out that there is nothing of note to what was proposed approximately two months ago, we will soon find out if the issues with the securities in question were based on the buyers or sellers being out of whack, or a question of valuation or solvency.

Since the Troubled-Asset Relief Program (TARP) is effectively out of money -- more than $665 billion out of $700 billion has already been used -- we would currently expect nearly $2.0 trillion needed

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