Dillution is Good

Don't ask me why, but many analysts will claim dilution is good on the banks because it raises capital and thus strengthens the bank. Therefore, you should be investing in these troubled banks now. You just go right ahead. Party on, Garth!

I just watched Lou Dobbs say, "New jobless claims dropped dramatically to 600,000 down 34,000 from the previous month, signaling the end of the recession." Any idea how much he was paid by the gov't to say that? There is no way a reporter like Lou Dobbs says something like that from his own mouth without either a gun to his head or serious money under the table.

Do any of these guys have any idea the impact of 600,000 more unemployed workers in this economy? It's like the 34,000 fewer unemployed have a bigger impact than the 600,000 who are unemployed. Insane.

The banks all went up after hours, no matter how bad of shape they are in. AXP had the highest debt exposure. BAC has the highest potential losses. But what is really amazing is, all the banks are allowed to move on. None are insolvent!

OK, right. They are solvent only because their toxic assets are not being accounted for correctly. If they were, many banks would be insolvent and there would need to be mergers and acquisitions. But that would create banks bigger than too big to fail. And that can't happen. The reason all banks had to pass the test was to avoid creating even bigger banks. So this is no surprise.

The banks are a mess. A former Fed Chairman said on CNBC today that he has no idea why anyone would be investing in banks after this. Someone, who finally knows what they are talking about.

In the mean time, banks stock prices will probably go higher for no other reason than adrenaline by bulls trying to hold onto the bull market. That's fine. There will be plenty of opportunity.

The unemployment number doesn't matter tomorrow. Whether it is 450K, 600K or 650K it will be spun such that it is a good number even though any 6 digit number is very very bad.