Regional Banks

If you "buy the f---ing dip" make sure you "sell the f---ing rip".

In the US, we instead chose to undermine capitalism and the economic cycle. In the process we’ve undermined trust in the system. Until this is remedied there will be not REAL recovery.

Are we really in an economic recovery or is it a figment of the Fed's quantitative easing? This will be the biggest factor in the 2012 elections.

Last week we heard from Nomura's bearded bear as Bob Janjuah restated his less-then-optimistic scenario for the global economy. Today his partner-in-crime, Kevin Gaynor, takes on the bullish consensus cognoscenti's three mutually supportive themes in his usual skeptical manner. While he respects the market's potential view that fundamentals, flow, valuation, and sentiment seem aligned for meaningful outperformance, it seems actual positioning does not reflect this (yet). Taking on each of the three bullish threads (EM policy shift as inflation slows, ECB has done and will do more QE, and US decoupling), the strategist teases out the reality and what is priced in as he does not see this as the March-2009-equivalent 'big-one' in rerisking (warranting concerns on chasing here).

Another day where the problems of the PIIGS, gyrating interest rates, skyrocketing unemployment and vacancies, imploding housing starts, and other assorted ills are totally shucked off by the favored "must own" sectors: REITs, retail, and financials.

Despite the market's earlier memo that its profit for Jan and Feb is up, Moody's is doing all it can to spoil the party: the rating agency just dropped a bank rating action neutron bomb. Moody's action is based on the expectation for higher credit losses than previously anticipated and banks ratings most likely to be affected are those with significant commercial real estate exposure, specifically construction and land development.