Thursday, July 2, 2009
Seven Bank Failures Announced Today
The FDIC decided to do a swarm over the state of Illinois as six of the banks were in Illinois and one was in Texas. This may be the spark that gets the program traders to switch to the short side and sell the stock market rallies instead of buying the dips.
Five banks last week (which was until today a record for this bear market cycle) and seven this week. Two weeks does not a trend make, but numbers like this should scare any rational investor, especially when the PE ratio for the S&P 500 is at 120 right now. Watch the term "green shoots" fade from the CNBC lexicon as fast as the phrase "Goldilocks economy" did last year.