This debacle took years to develop into a Class 5 hurricane and will not be cured with one violent short squeeze. It’s reminiscent of the WHO concert years back when everyone was trampled and people died trying to get out of the door at the same time. Unless you were driven by fear (short) or greed (let’s kill the shorts) can anyone tell me they would have rushed to pay $40 for the still toxic shares of Bank of America on Friday? We all know the answer to that one.
The toxicity may soon be removed from the balance sheets of these companies, but their revenue models, business plans and mission statements have been obliterated, and will take years to be reinvented.
Common sense and logic prevent me from buying a financial, and I can’t short if I wanted to. The market has had a move that would be considered a decent 52 week move, so buying in here is insanity. Housing and unemployment is still bearish and joblessness can only grow from here.
Could you imagine the irony, if over the days and weeks to come, we actually hit the lows again–without being able to short? Don’t laugh, anything is possible.