Inside Wall Street: The Real Reasons the U.S. Banking System Lost Its Way
Jul 10th, 2008 | By Shah Gilani | Category: Stock Market InvestingTo understand this crisis is to first understand what’s wrong with banks. We cannot come out of this credit crisis if we do not repair the damage to the commercial lenders in the U.S. banking system. And by “repair,” I’m talking about fixing their credibility and integrity just as much as I am referring to the need to restore their capital base.
This country is the capitalist behemoth that it is because of our banking system. Where are the regulators? Where is Congress? Where are the outraged stockholders and borrowers? Will it take a banking-system collapse and a run by depositors to get these problems addressed and fixed?
Until the banks are fixed, avoid all financials – especially commercial banks and investment banks. Stay short on the dollar. Short the major stock indexes. If you have to remain long in equities, sell calls on a rolling basis.
The next stop on the Dow Jones Industrial Average is likely a test of 10,000.
Editor’s Note: Contributing Editor R. Shah Gilani – and his column, “Inside Wall Street” – are brand-new additions to the Money Morning lineup. Gilani brings readers the ultimate insider’s view: He’s toiled in the trading pits in Chicago, run trading desks in New York, operated as a broker/dealer and managed everything from hedge funds to currency accounts. His self-professed goal is to take readers on a journey through the “shadowy back alleys” of the U.S. capital markets – and past the “velvet rope” that typically keeps the average investor from learning the secrets that sit beyond, just out of reach.
Source: Inside Wall Street: The Real Reasons the U.S. Banking System Lost its Way
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