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Prediction: Friday Is The Day Banking Sector Drops!

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August 07, 2009 – Comments (16) | RELATED TICKERS: FNMA , TGT , RBS

I predict that the banking sector today 08-07-09 will take a hit today.  Here is why:

-World markets got slaughtered overnight with most world markets taking over 2% hits that include a -500+ drop to Hang Seng Index

-RBS dropped almost 16% in a single day and said bad-debt charges won't improve until 2011 now!

-US unemployment now predicts to hit 9.7% 26 year high

-FNM reported $14.8 billion loss for 2Q and needs money again for the 3rd time

-Most retailers reported huge losses (only lessened by the fact they were not as bad as predictions)

DISCUSS

16 Comments – Post Your Own

#1) On August 07, 2009 at 5:54 AM, barbarosssa25 (< 20) wrote:

I agree man i mean comon what a run they had but  its the perfect storm lol

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#2) On August 07, 2009 at 7:22 AM, outoffocus (22.81) wrote:

You sure about that? AIG had a "profit" this quarter.  Looks like they financials may have another up day.

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#3) On August 07, 2009 at 7:51 AM, mikecart1 (98.70) wrote:

#2, Profit my @$$.

Sooner or later the truth will come out.  I lose today's battle.  But I will win the war! :D

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#4) On August 07, 2009 at 9:03 AM, solitaryway (< 20) wrote:

From Reuters:

"Second-quarter net earnings were $1.8 billion...

the latest results included $5.7 billion in unrealized gains on investments and from the adoption of new accounting rules."

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I wonder if this rally will actually end on "wonderful" news in the same way that the March freefall ended in the face of "doomsday" news.

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#5) On August 07, 2009 at 9:12 AM, mikecart1 (98.70) wrote:

#4, I don't even know what to say anymore.  It seems like they let these companies get away with anything.  Fines the past few weeks for breaking accounting rules like GE.  Then you got companies allowed to just hand off parts of their company to others to make their profits look better.  Then you got AIG who has taken billions from everyone to actually be allowed (ALLOWED) to say they got a profit all of a sudden.

Well gosh!  Let me run my lemonade stand over here and let all my customers and the local dude at the corner pay me $100 for my losses and let me use that money to make my balance sheet look profitable!

That is the American way! :D

Has this planet gone crazy?

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#6) On August 07, 2009 at 9:52 AM, StopLaughing (< 20) wrote:

It is very hard for the banking sector to lose money as long as the Fed is monetizing. They just exchange toxic loans for TBonds, they get paid interest on thier Fed deposits, they get to borrow at more or less 0 and lend it out at 5+%.  Banks are leading the rally for a reason.

They are one mechanism the Fed/Administration uses to lift the market and the economy.

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#7) On August 07, 2009 at 9:52 AM, leohaas (32.05) wrote:

You are making good points, but at the time of writing (~9:50am), FAZ is down more than 5%. Wouldn't FAZ be up if the banks are dropping?

Disclosure: long FAZ.

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#8) On August 07, 2009 at 10:01 AM, solitaryway (< 20) wrote:

Yeah, we live in a world of entitlement with a "no one is allowed to lose" mentality -- a politico might say it smacks of socialism.

I'm hoping it all shakes out in a more free-market fashion, but we'll see...

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#9) On August 07, 2009 at 10:08 AM, mikecart1 (98.70) wrote:

#6, I think the lift is sending this country backwards

#7, Don't need to talk to me about FAZ.  I know too much about it i.e. worst freaking investment I ever did.  Must of been out of my damn mind the day I got it.  My only stock to ever see the negatives (seriously).

#8, Yeah this giving trophies to last place, and passing the worst of students.  This country is going straight to hell.  No accountability or responsibility for anything anymore!

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#10) On August 07, 2009 at 3:07 PM, mikecart1 (98.70) wrote:

LOL I guess I was wrong :P

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#11) On August 07, 2009 at 3:17 PM, IIcx (< 20) wrote:

maybe not but it's coming down to the wire - S&P bounced off of the 1017 level so we could see some major profit taking in the next 45 mins but its pretty unlikely.

Have a great weekend. 

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#12) On August 07, 2009 at 4:03 PM, cthomas1017 (90.47) wrote:

No, Mike, you were right one, just off by a day or so.  I was thinking about putting some insanely low puts on FAS for next January.  I mean, between now and then one of the following will happen...
 1) serious October surprise that some might refer to as "Black Something or Another"
 2) Israel will mix it up with one or another of the "-istan's"
 3) Horrible retail Xmas season
 4) Someone wakes up and sees round two of mortgage defaults rising
 5) Horrible back to school retail season
 6) Healthcare reform passed that makes 1/2 of country believe costs will skyrocket
 7) Monetizing of debt (rumors abound, awaiting verification)
 8) China & Co. scale back T-purchases
 9) 10% S&P correction & fear rebounds
10) California or some other state defaults after being unable to cut spending with tax revenues falling
11) Gosh I didn't think I'd come up with 5 when I started this list and if I tried just a little bit, I'd be able to hit 20 or more.

Like I said, you weren't wrong, just off by a couple of days.

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#13) On August 07, 2009 at 4:10 PM, mikecart1 (98.70) wrote:

#11 and #12: Thanks guys

I woke up at 5am today and looked at global stocks overnight and thought I could predict today's stocks. 

At least I can admit that I was wrong lol.  Most people here claim to be 100% know-it-alls.  :)

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#14) On August 07, 2009 at 4:21 PM, IIcx (< 20) wrote:

It's all good Mike and great practice for fund rebalancing - requires a decision nearly a day in advance.

To be honest, I think your prediction was only one session early. We'll see on Monday.

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#15) On August 08, 2009 at 1:52 AM, cthomas1017 (90.47) wrote:

Mike,
Rule #1:  If I ever wake up at 5am thinking I can predict today's market, I must roll over, go back to sleep until 9AM, make a slow cup of really powerful coffee, shower, throw on a swim suit and tshirt, and hit the beach.

Rule #2: If it's winter and in Michigan, do the same, except take a flight to get to the beach.

Once back from the beach, you are sure to learn that the day off was much better spent and less expensive too!

No predictions for Monday.  I'll even resist making a prediction along the lines of PREPARE!!!!! 9.09... 

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#16) On August 12, 2009 at 2:17 AM, mikecart1 (98.70) wrote:

Guess I was a little early in prediction.  Prepare for today to see DOW drop bigtime.  World markets took red bigtime.

BTW: It is 2:15am here LOL.  Yeah I'm a loser. :D

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