Stocks Could Explode With Results Of March 12th Meeting
By: Braunie
Sun, Mar 8 2009 | 0 Comments
On Thursday March 12th a House Financial Services Subcommittee plans a hearing on the mark-to-market accounting rules, which have been blamed for forcing banks to report billions of dollars in write-downs. Mark-to-market accounting requires that assets be valued at current market prices. Some larger banks say it forces them to mark down assets to artificially low prices in the current financial crisis, even when banks intend to hold the assets past the current reporting period.
There is a rumored report out there by Reuters which hints that action will be taken to relax the rules. Jon Najarian of Option Monster thinks this could be very bullish for the market. “If that Reuters report is right there’s a very good chance the entire market will get a big lift.” He also went on to say “if the government relaxes mark-to-market for 12 to 18 months you could see financials move 100% in a matter of hours.” He continued, “In fact, I hope you’ll replay the soundbite because if the government relaxes mark-to-market accounting a number of banks stocks will be unbelievable values at these levels.”
A couple of speculative plays you might want to consider before the 12th meeting could be The SPDR FD Financial (XLF) and Financial Bull x3 (FAS).. Day Traders keep an eye on (BAC), (MS), (C). These plays are not for the weak at heart. They are very risky if the market goes against you so do your DD before you enter.
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