Posted on 04/20/2009 8:54:46 AM PDT by Scanian
NEW YORK (AP) -- Investors are having doubts about banks' profit reports and wondering whether their better-than-expected performance mask larger problems with bad debt.
Stocks fell sharply early Monday as investors sold financial stocks and locked in profits after a six-week rally. The major indexes slid more than 2.5 percent, including the Dow Jones industrial average, which fell 200 points.
Worries about the financial industry overshadowed Oracle Corp.'s announcement that it would acquire Sun Microsystems Inc. for $7.4 billion and a $6 billion bid by PepsiCo Inc. to buy its two biggest bottlers.
The news came at the start of the busiest week yet for companies reporting results from the first three months of the year. Investors are looking for signals that a rally from 12-year lows in early March can continue.
Wall Street has been emboldened by early signals that the economy could be stabilizing, but after a 24 percent surge in the Dow Jones industrial average some investors are asking whether the market has risen too quickly.
Joe Saluzzi, co-head of equity trading at Themis Trading LLC, said traders are now viewing bank earnings with more skepticism amid concerns that even the better-than-expected results are disguising problems. Income from trading and low-cost borrowing rates have boosted results but not erased more difficult problems with bad debt, he said.
(Excerpt) Read more at finance.yahoo.com ...
Per Cpl Hudson: We’re on an express elevator to hell! GOING DOWN!!!
Hope. Change. Those are orders.
—The Messiah
My worry is that that is exactly the way Zer0 wants it.
But Obama still sees a glimmer of hope!!
Insolvent Banks showing profits... And they expected people to buy it? Try again.
In fortunately the glimmer he sees is the train coming down the tunnel he just lead the country into!
As another FReeper wrote not long ago, it takes skill to make a profit borrowing money at 3% and lending it at 5%. Very little skill to borrow at 2% and lend at 5%.
If the banks are doing so great then they need to keep their damn toxic assets and return all the TARP money. Or are they showing fake profits by playing very bad accounting games that are many time worse than Enron accounting games? I will say yes to that question.
Shalom.
“My worry is that that is exactly the way Zer0 wants it.”
I’ve heard that the Chinese characters for “crisis” and “opportunity” are the same. There is some validity to this belief.
Unfortunately the “opportunity” that Obama sees will not be to our favor.
I’m with you.. If banks like BOA is doing good, they why need the TARP money in the first place.. Something stinks..
The stock market has been very irrational as of late. WTF has changed in the last 30 days that warranted this blast off?
Wasn’t BOA forced to take the bribe, er, uh money?
The stuff on the books is still crap. The banks are failing the stress test and the Treasury is trying to hide it until after earnings come out.
Basically we are going to see the Fed Government take over our banks...
That is true..
Some banks took the money as a lifeline whereas others were forced to take the money so no one else would look bad. (When Treausry Sec tells you that you take the money or the government is going to audit the hell out of you that is a defacto loaded gun being pointed at you).
The banks are doing well from getting cheap money and loaning it out at good spreads and from accounting rules. Foreward looking though people should be afraid.
The Feds could have put up a Trillion dollars and created new banks that could have been sold off to the public and the bad banks could have been allowed to fail. Ugly for certain but come on, how much has been flushed down the toilet already?
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