So now we've seen these results using the more adverse scenario (right) for capital cushion requirements until the end of 2010. Imagine what those figures would look like without the accounting rule change that magically created profits for the banks. So what's the need for the PPIP program then? I'll take a wild guess and say the couple trillion in off-balance sheet doo-doo was ignored under these tests? Or, could it be the government used assumptions for offloading this garbage onto the taxpayer leveraged lending facility also known as the PPIP.
Why is insider buying at the lowest levels ever when we are supposed to be seeing green shoots? What is Bernanke still buying the long end of the curve to try to keep rates down if we have these green shoots? What is the driver for earnings with so much debt overhang in the system and a consumer that will be deleveraging for two years. All I'm seeing now is a lot of P and little E. Sure there were a lot of beats this quarter, but that is only because the analysts lowballed most estimates after the egg on their face the previous Q. The current valuation on stocks is quite rich.
Lastly, the bulk o market participants have come to expect a moderate pullback with a rally through the summer. When the bulk of the market starts to expect something you should start to prepare for the opposite. That's not a call, just a warning that the pullback might not be so shallow.
For the time being keep eating those green shoots pictured above and you will hallucinate visions of Lincoln Navigators and Hummers.
