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What just happened to Bank/Fini stocks?

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DCTrader
Super Contributor
Not that I'm complaining... but what caused the jump?
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8 REPLIES 8
Not applicable
Ouuuuchhh,.... Say no more,.. lol
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Wizard
Super Contributor
Some insurer in the US has decided to keep the high credit ratings of the Bonds for the next 6 months. Since Friday low on the DOW of 12155 it has jumped 400 points just on the back of that! Not a good time to short despite the bad news flying around. Will we go to new highs>>NO! Reality will catch up eventually
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asylum
Super Contributor
yep dow going up on any bit of news been trading the dow at night for a couple of weeks now, Friday the dow shot up on news that Ambac might get a bail out, and yeterday i managed to grab 73 points just on the news that ambac's rating might not be affected it shot up 140 points in under a minute. So yes maybe reality will eventually sink in as that was the only piece of percieved good news the rest was all doom and gloom yet on that news it went up, strange people the Yanks.omo
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DCTrader
Super Contributor
It's understandable. The credit crunch issues were all priced in ages ago and the results are now reflecting that. Any good news is a sign of possible levelling out or recovery, so people jump on it. Market driven by emotions in the end I guess...
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asylum
Super Contributor
yes but still a lot of write downs coming through.
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platsak
Super Contributor
Read article this moning that says write downs does not always reflect actual losses incurred but is often an instrument misused by banks.
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asylum
Super Contributor
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DCTrader
Super Contributor
2 arguments: 1) Profit smoothing - It's better to constantly report good earnings vs 1 year amazing earnings then the next year just average earnings. 2) If you going to take a bad hit in 1 year, then take the opportunity to clear all your write downs/provisions etc and make it really bad in order to make the following years look good. OMO
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