The world has changed indeed.
Or has it?
Lloyd Blankfein, CEO of Goldman Sachs, has called for banks to adopt more stringent accounting practices. In the FT of today, Blankfein outlines seven areas of misdemeanor including valuation of assets and the outsourcing of risk management to rating agencies.
Well, let me tell you something: those rating agencies are private held institutions, with a stock exchange quotation, intended to produce dividends for its shareholders and paid by banks to make it possible for banks to sell their lofty products. In no way they are independent. They need the customer fees to exist. And banks need their ‘ratings’ to sell those lovely complex derivatives.
In the UK the bank bonus row escalates. Yes, Alistair Darling is reading this blog too. Alistair will learn quickly that this popular theme has some dark angles: a lot of bonuses are written down in contract clauses. Not so easy to abolish them.
But is this the news to concentrate on?
The answer is: NO.
I just ran a renko-scan on positive outbreaks and a long list was produced. In fact the longest list ever.
For a universe determined to implode, this is rather disappointing.
So, time to make a statement: I think we gonna see a broad rally the coming days and –hopefully- weeks.
If this is the case a lot of bears are going to burn some vital body parts.
I was alarmed by the Baltic Dry Index and discovered this weekend that a lot of sectors are producing bullish noises.
Maybe I am wrong. But be prepared.
As an exercise we show you the chart of Caterpillar (ticker: CAT). The positive outbreak is clear.
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