Monday

Earnings Announcements: Novellus (NVLS)

Earnings reports begin this week…  Dollar, yen, francs get bought…  Medvedev shows off new coin!  A busy week! And Now… Today’s Pfennig!

First-quarter earnings reports for the big banks weren’t bad on the surface. But banks had to pull some rabbits out of the hat to do it. For example, Goldman Sachs skipped December in order to post improved numbers.

Bank of America Corp. (NYSE: BAC) plans to sell assets and issue more common stock after being told by the federal government that it must raise $33.9 billion to adequately guard against “more adverse” economic conditions.

It’s clear to at least some that banks can’t subsidize the banks forever. So where does that leave bank share prices? It’s a valid question, even if it can’t be heard right now over the din of champagne corks popping and the chorus of Hallelujahs wafting up over Wall Street and the White House.

We have had our suspicions about the current stock rally ever since it kicked off by ‘leaked’ memos by Citigroup, BoA and JPMorgan Chase announcing a return to profitability.

On April 21, Treasury Secretary Timothy Geithner said the “vast majority” of U.S. banks have more capital than needed.  Geithner’s remarks come on the heels of a surge in reported quarterly profits by the big banks.

There are a lot of unanswered questions for Tim Geithner and his pals in the banking industry. One Wall Street suit who’s dirtied his bib is Bank of America CEO Ken Lewis. Lewis should go to jail for securities fraud, according to Porter Stansberry of Stansberry and Associates Investment Research.

The dogs in the street know Washington is going to have to come up with more cash to plug the gaping holes in banks’ balance sheets. Of course, our Orwellian government doesn’t want us to think that major banks such as Citigroup and Bank of America are insolvent.

World stocks climbed strongly on Monday for a fifth session running, lifted by hopes that the U.S. economic downturn may be bottoming out as investors sought to take advantage of cheaper equities.