Monday, April 6, 2009
We're Out of Mayo...
Not that he is the most credible source, however it appears that bank analyst Mike Mayo still has some market clout. After an announcement that he believes that bank sector problems are far from over. This tid-bit of information was enough to have a 150 sell-off in Dow Futures. (1) My concern here is that Mayo only told the public what many had already surmised. The financial crisis is not over; and we could well only be in the middle of a game that lasts extra innings... This bit of information could help spoil the fun and games of this rally... After all, earnings determine value... I think.
Alas, Dick Bove immediately announced that Bank of America was/is/and continues to be a buy! If Mayo is a source that may have "some" credibility issues, Bove has no credibility. Bove was recommending Bank of America last year when it was in the 20s. "Thanks again Dick."
If an analysts comments can set the market on ear, then it can only mean that there is a heightened sense of nervousness in the air. I will readily admit that the rally to the upside has been absolutely phenomenal. But, any time Fox Business starts playing "Don't Stop Believing" before market close, the story is already told. A hope and a prayer... And this whole time I thought it was the job of media to report the news, not make the news.
Posted by at 2:08 PM