Stocks Could
Skyrocket After March 12th
Investors such as Jon Najarian are hopeful that stocks could
soar next week. They say we could see an explosion to the upside
after a meeting scheduled for March 12th.
On that date, a House financial services subcommittee plans a
hearing on mark-to-market accounting rules, which have been blamed
for forcing banks to report billions of dollars in write-downs.
Karen Finerman has long been an advocate of putting these rules
on hiatus for a while and “letting the banks breathe.”
If that meeting results in the government relaxing
mark-to-market rules, optionMonster Jon Najarian thinks the stock
market could explode. On
Wednesday he told us, “if the government
relaxes mark-to-market for 12 to 18 months you could see financials
move 100% in a matter of hours.”
And he went on to say, “In fact, I hope you’ll replay the
soundbite because if the government relaxes mark-to-market
accounting a number of banks stocks will be unbelievable values at
these levels.”
Consider the soundbite replayed. (Click
here to read that full article.)
Background
U.S. industry groups have urged the SEC and FASB to
significantly alter or suspend the accounting rule, saying it is
undermining the government's multibillion-dollar effort to
stabilize the financial sector.
Mark-to-market accounting requires assets to be valued at
current market prices. Some banks say it forces them to mark down
assets to artificially low prices in the current financial crisis,
even when banks intend to hold the assets past the current
reporting period.
What's the trade?
Jon Najarian suggests a higher risk play – he suggests
long the Financial Bull 3x ETF
[FAS
2.64 
-0.11
(-4%) 
] which is triple long ahead of the
mark-to-market hearing.
---------------------------------------------------------------
watch out for this date, as the stock market will probably
rally.
sigh....
That's only delaying the inevitable. When you drop mark to
market accounting, the banks will only be inflating the values.
People may be stupid and accept the figures, but the sharks arent
stupid.
Sharks are the numerous ponzi schemers still hiding under the
low tide of the inevitable stock market collapse, short selling now
to survive waiting for such ponzi methods of
accounting.
They would have learnt their lessons by now, and they only want
to get out alive and not clapped in chains. When the stock
figures rise, they will sell and get out of the market. When they
sell, the stock market will collapse again. Madoff's scam
was $60billion. How many more others who cook their books
but did not confess as Madoff did, who escape SEC
investigations?
The inevitable will come. Best let the stock market be
destroyed. New ways of obtaining capital will have to be found for
better honesty. The stock market casino had failed
humanity through its greed. We this generation must pay
the price and not let our next and future generations be
doomed.