Bank of America is no longer America's once vaunted investment banker. Blackstone's lack of transparency is not the new American capitalists interpretation of where this country is headed. Those two stocks are down -19% and -11% today for reasons that are unique to their very own shortsightedness.
Trading down another -9% today, the US Financials (XLF) have already crashed in 2009. Tomorrow that will be yesterday’s news.
For the year to date, we have a developing story of the excesses unwashed meeting their maker. At down -30% for the year to date, in a year that is only 20 days old, today we can say goodbye to the horse and buggy whip thought processes of the leverage cycle past. Goodbye and Good luck.
Before we can “dust ourselves off, and rebuild it”, the SP500 needs to rid itself of the market cap associated with the banking system’s Crisis in Credibility. Everything starts with confidence. Obama has that - and yes, the best things in life take time to build.
We are most likely going to test my downside SP500 support line of 818 in the meantime.
Keith R. McCullough
CEO & Chief Investment Officer