The Geithner Broad Outline, Not Really a Plan, Speech
There is no doubt that Geithner’s lack of a plan, lack of details, and high expectations set prior to the speech killed the Financials on Tuesday. I have placed big bets on Financials, mostly in anticipation of good news from Geithner, as many folks had judging by the run up in Financials on Friday through Monday.
It’s not all bad news though. In my opinion, short of announcing Nationalization, the speech was about as bad as it could possibly get. That may have marked a bottom in the Financials, at least for the short term. I bought a little more that day, though I bought too early in the day and missed the subsequent lows reached after the speech.
Here are a couple of great articles on the Geithner Debacle from CNBC:
- Geithner’s Flop, Obama’s Fault, by Dennis Kneale
- Is Tim Geithner Ready for Prime Time?, by Larry Kudlow
Overall I’m still bullish on the Financials. I think the reaction Tuesday was deserved, but likely a bit over blown. I really don’t think the situation is as bad as it feels anymore and I expect to see that play out over the coming weeks and months. However, I will be trimming back my exposure to individual institutions and replacing those positions with ETFs in order to lower my risk a bit.
