Sunday, 25 January 2009

Only having to worry about an economic recession rather than a financial meltdown

If the U.S. administration takes a lead on setting up a bad bank and removes all of the dodgy paper, for which there is zero liquidity, off the bank's balance sheets – we may be approaching a sustainable bottom in the financials.
There were some suggestions on the charts that Tuesday’s (Jan 20) sell-off lacked the conviction of the November sell-off.
The numbers that the taxpayer would be effectively underwriting in the bad bank would be staggering but the private sector might look at banking stocks again if they know that they only have to worry about an economic recession rather than a financial meltdown.

No comments:

Post a Comment