S&P cut it’s credit rating on the UK to negative but maintained its AAA sovereign rating, gives you such a warm feeling as this same band of boneheads were the last to downgrade bond insurers until they were trading a drill bits.
Geithner & Co. announced yesterday that the economy in 2009 will be worse than originally estimated and the 2010 recovery will be weaker and slower than expected. The positive catalysts for the banks, if you consider massive dilution positive, is almost over and I guess Geithner is starting to slowly “buy back” the sales job to the public. When it comes down to extinction or dilution I guess you go with the latter, that doesn’t mean I want to own a bank though.
Are we just in a bear market rally or a new bull market? Who knows and who cares, just trade it. No one knows, if they say they do they are lying and need to be immediately put on mute. David Rosenberg, former economist at Merrill and a guy that I respect (been 100% correct btw) thinks we have a good shot at retesting the March lows. Lazlo Birinyi waxed bullish this morning by saying the S&P could rally 80% in the next two years.
Someone will be right and someone will be wrong, and somewhere in the middle lies the real truth about how bad the economy really is.