Bernanke Sees Improvement

Bernanke is seeing improvement in the financial institutions. I think we will see a few more reports like this over the summer as the Fed sets up to finally address the inflation issue. Due to the elections the Fed will be afraid they might be seen as trying to influence the outcome so they will hold off on interest rate hikes. If the "good news" comes earlier we may see hikes sooner and then a lull during the election. Be sure to watch Wednesday's CPI report.

Citigroup Fire Sale!

Everything must go at Citigroup, well almost everything.

Buffett's Credit Crisis Insight

Liquidity Translation

The Fed continues to open up liquidity through the Fed window and lower interest rates but what has it done for the banks? The banks are able to work their day to day functions but they haven't opened up their own lending windows.

No Foolin I'm Bullish

Despite all my rantings on the economy and how I think the government is making things worse I am bullish for April. Seasonally speaking the market cycle is bullish this month. Last months break down in commodities on the DBA and the DBC along with weakness in Gold (GLD) and Oil (USO) tell me there is a window of relief from out of control commodity bulls. Even though Australia didn't cut rates last night we are seeing the dollar strengthen against most all other currencies, FXA, FXC, FXE, etc. Dollar strength tends to lead the stock market.

Don't get get me wrong, I am long-term bearish still. I think we will see the CNBC and BTV start marking the end of the credit crisis, calling Bernanke a hero, but the rally will be a sucker's rally. We have another $300 billion in losses coming for our countries financial institutions, we will see interest rate hikes later in the year when the Fed is forced to address inflation, and the rest of the world is now feeling out financial pain. Play the bullishiness while it last but use stops and position sizing!

JPMorgan Calls in Bears' Note

Last week the Fed created a new program allowing large banks to provide liquidity to other financial institutions. JPMorgan (JPM) then took Fed money and loaned it to Bear Stearns (BSC) for the outlined 28 days. JPM decided to just go ahead and buy out Bear Stearns over the weekend in a very interesting move. JPM has certainly been harmed by the credit crisis too but, the diversity of product and overall size puts them in a position to expand.