Results

by Larry Levin

Tax-Cheatin-Timmy's so-called "stress test" results are finally in and there are no surprises. The results give us a little from column A and a little from column B to make everyone happy. That is to say, some banks need extra money and some don't, but none are said to be in real trouble. In fact, the so-called stress test should have been called the "Supervisory Capital Assessment Program," otherwise known as the SCAM.

According to the results of the SCAM, Bank of America must raise $34 billion, Wells Fargo will need $13.7 billion and Shitigroup will need to raise $5.5 billion.

Other banks that need to raise capital include GMAC which must raise $11.5 billion, Morgan Stanley $1.8 billion; and Regions Financial Corp., $2.5 billion SunTrust must raise $2.2 billion, Fifth Third Bancorp must raise $1.1 billion and KeyCorp $1.8 billion.

The other nine companies were told they didn't need more capital included J.P. Morgan and Goldman Sachs of course. Some of the others are MetLife, American Express, Bank of New York Mellon, and Capital One.

We all knew what the end game was - right? I'm confident the government engineered the stress test results to produce a rally in bank stocks, which started some time ago with the announcement of the SCAM. As said before, the delay worked. The "G" had no other reason to engage in such a stunt. If the banks actually had to produce an accurate accounting of their balance sheets (and all off-balance sheet liabilities), the sector would tank. We all know the Fed and Treasury aren't going to let their investments suffer at the fate of transparency, real accounting standards, truthful disclosure and other details that can get in the way of a perfectly good con game.

And how did the con, especially going back to make believe accounting, get done? Bank lobbyists. "The banks, hard to believe in a time when we're facing a banking crisis that many of the banks created, are still the most powerful lobby on Capitol Hill, they frankly own the place." - Senator, Dick Durbin, Ill



Previous Day's Trading Room Results:

Trade Date: 5/7/09

E-Mini S&P Trades*
(before fees and commissions):

1) B/away buy @ 8:30am at 926.75 = -1.50 (1 lot)

2) 80% sell @ 9:50am at 914.50 = +1.50 & +7.50 (2 lot)

3) OTF sell @ 11:40am at 911.25 = -1.00 (1 lot)

4) VA buy @ 12:30pm at 904.00 = -1.50 (1 lot)

5) OTF sell @ 1:10pm at 905.50 = +3.75 (1 lot)

6) VA sell @ 1:30pm at 904.50 = +4.00 (1 lot)

7) Algorithm positions (2)...combined Secret's and Algo total...+12.00


Electronic (YM) Mini-Dow:

1) None today



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