Regulators are supposed to issue the results of the bank “stress tests” on May 4th.
Question is, will they have the guts to do so?
No doubt they’ll issue something. But will it be the truth? Or will they sugarcoat the results to prevent — for a little while longer — a full-blown market meltdown?
Why the market plunged today
People can’t keep their mouths shut, especially in Washington. And we’re already hearing about “leaks” on the stress tests.
And if what they are saying is anywhere close to the truth, it’s looking very, very bad — much as I’ve been warning my subscribers for many months now.
The entire U.S. banking system is in a state of utter chaos! Among what we’re hearing:
- 16 of the biggest 19 banks are virtually insolvent
- If just two of those banks go under, the FDIC is finished
- The crisis is much bigger than anyone has admitted thus far — with upwards of $5 trillion at risk!
And forget the so-called “earnings” banks like Citigroup and Bank of America have been reporting. Scratch the surface, and there is a lot of rot underneath.
Forget the fairy tales of economic recovery
and a soaring stock market
Get ready for Dow 6,000, instead.
The recent rally was nothing more than a temporary short-squeeze. No conviction. No long-term investors. No new money. Low trading volume.
Just fast money on a quick-hitting pirate raid.
The Pollyannas of the investing world have been predicting that recovery was just around the corner ever since this stink-bomb first blew up. But they’ve been wrong — and I’ve been right — every step of the way.
Things are going to get a whole lot worse before they start getting better. Worse for the economy. Worse for the stock market.
The above is Michael Shulman's opinion.
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