Lewis Completes Trifecta Of Profitable Banks

First Vikram, then Dimon repeated what he had said earlier, now Lewis adding to the short squeeze which has resulted in a 14% bear market rally over the past 4 days. Kenny whose legal troubles with Cuomo are escalating, also expects BofA to be profitable in 2009 and will not need any more federal aid. Naked Capitalism has some good points on the propriety of leaks, whether planted or not, as well as media disclosure of this nature, although in its eager attempts to bail out the capital markets, it is not likely that the SEC or any regulatory authorities will have any beef with this course of action:

Now consider: statements by public companies about their financial condition, operations, and results are not held to a mere standard of accuracy (as in narrowly true) but "not misleading". The critical language is:

It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange....To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading

Now the beauty of this little leak is that it covered a two month period, which means it cannot be compared directly with the quarterly results. It does not include writedowns (which I would argue makes it misleading).

A bear market rally is, of course, to be expected after the kind of dramatic drop in the market we had seen recently, however, in order to not lose sight of the big picture, it is prudent to remember both the media leaks and the conference call Lehman Bros was peddling in the week before it filed for bankruptcy. Throw potential manipulative improprtiety on top of this, and it makes sense to be very careful when considering investing in a market move of almost 15%.