I’m short JP Morgan. They have a gigantic derivatives position. Their off-balance-sheet derivative positions are among the top three in the world, if not the largest. The bank’s credit-card loans also are a disaster waiting to happen.
There are plenty of reasons to short JP Morgan, but that doesn’t mean it can’t rally for a while, and it probably will.
I don’t think it’s in good shape (the US banks). They should have a good rally after their huge declines. But are they sound again? Absolutely not.
“I don’t see how there can be much more (then a bear market rally). The world is in serious trouble. There are more bankruptcies and failures to come.
That doesn’t mean the rally is over. It could last a few days, weeks, or even months.
But this problem isn’t over yet, and the American government is making it worse by spending obscene amounts of money on the wrong thing.