The recession is over but the depression has just begun

The recession is over but the depression has just begun >

Market - COT

COT reports:

S&P - Moves to Cash June 1st
Gold - Long June 1st
Oil - Long from May 25th
US Banks (BKX) - Long from May 25th

US Banks - Insolvent

From MoneyNews.com April 23, 2009

Pershing Square Capital Management fund manager Bill Ackman is betting that the share prices of big banks will decline.

He’s also hoping to give them a little push.

Ackman argues that banks like Citigroup and Bank of America are effectively insolvent, a view some economists share, but one the banks vigorously deny.

“The problem when you are CEO of a business is that you get used to being able to do anything you want, and you get a little bit too full of yourself,” Ackman told The New York Times.

Ackman is planning a media blitz urging banks' bondholders to exchange their debt for equity in order to shore up the institutions, a move that could well sink bank shares but boost Ackman's profits.

Ackman’s fund controls 25 percent of General Growth, the mall properties company that filed bankruptcy last week, and the firm will play a crucial role in restructuring the company, making it possible that Ackman and his investors could walk with hundreds of millions of dollars in profits.

Rumors ran rampant on the Web this week that bank-stress tests devised by Treasury Secretary Timothy Geithner show that 16 of the 19 big banks tested are "technically insolvent."

Geithner’s office released a statement saying that the results from the stress tests weren’t completed, yet damage to the stocks was already done. Since then, Geithner has testified that bank capital is “adequate.”

Always good to remember....

U.S. Markets Wrap: Stocks Rise in Longest Streak Since 2007

The markets are up .... 4 weeks running. From the March lows they're up about 20%-25%; ytd however they are still down. It is interesting markets are moving up while unemployment is hitting new highs. All in unemployment rate is a huge 15.6%! This is the Depression bear rally that we have been expecting. This could carry the markets up still on which on the Dow could be between 9,000-10,000. Gold on the other hand has pulled back to the $900 oz range. So this is the time to start raising cash or if you have the stomach for it selected buying with tight stops.

Weekly wrap up summary from Bloomberg reports -- U.S. stocks rose, capping the longest streak of weekly gains since 2007

Stocks Drop Most in 3 Weeks as U.S. Warns on Banks, Carmakers

It continues.... World Markets fall again

March 30 (Bloomberg) -- U.S stocks slumped the most in three weeks as the Obama administration warned that some banks will need more government aid and that General Motors Corp. and Chrysler LLC have one last chance to restructure. The Standard & Poor’s 500 Index fell 3.5 percent to 787.53 and the Dow Jones Industrial Average tumbled 254.16 points, or 3.3 percent, to 7,522.02.

Madoff Employee Breaks Silence

An employee of Bernard Madoff’s legitmate brokerage operations, which were described by the fraudster in his plea agreement as being “successful and profitable,” has told The Daily Beast that they were in fact money-losers that acted as a front for his Ponzi scheme.

Cards Raise ‘Canary in Coal Mine’ Alert in Canada

“If there’s another shoe to drop, credit cards are going to be it,” said John Kinsey, who manages about C$1 billion including bank stocks at Caldwell Securities Ltd. in Toronto. “It’s probably going to be the Achilles heel this year for the banks.”