JUST SOME BASIC THOUGHTS ON TODAY'S BANK RALLY

3/20/08 - All the bank stocks jumped today. That is just CRAZY. I am going to be getting out the short stick and start beating some of these dead horses to the short side next week if this continues. LEH has to go down. I will probably also buy puts on the XLF. The XLF is a short for sure on anything around 28 – 29. You could add to the short all the way up to 32. How can you think these banks will have any earnings? PLEASE - They can’t/ won’t lend money, the paper on their books is overvalued, there is no volume in their businesses, so where are the earnings going to come from? The fed? HA. It is the biggest suckers sector in the market in my opinion. I could be dead wrong, but the banks earnings aren't going to be there. There is no lending volume in their businesses.

There was too much lending at artificially high prices. All that bad paper has to be written off. All the property values have to drop. The banks don’t get out this easy. People are just to, to, to, to, eager to call a bottom. I think they have to get burned. LEH, USB, WM, WB, CS are some of the names I am researching.

WHY ARE SO MANY SO, SO EAGER TO CALL THE BOTTOM IN BANKS AND REAL ESTATE? Every headline starts “Have we finally put in a bottom” or “We have bottomed, now is the time to get in.”

The home builders had a big, big rally too today. I have to add to my SRS position. Do people think all the excess home inventory just gets absorbed overnight when lending standards are tight, people are loosing their jobs, homes foreclosures are increasing, property values are declining and the purse strings are tightening. People only pile in at the top and go and hide under a rock on the pull backs. We are having a pull back and that is when people hide, not go and buy. COME ON. It is basic market psychology, people chase momentum when everything is going well and get out of the market when everything is going bad. Do you think home buying is different and people are rushing to buy homes during a declining market? I don't think so.

If you can explain it to me, please, please do. I don’t get it and it goes against everything I have read and researched. The market is just illogical is my best explanation. Sorry for the venting. I just think the media is so eager to call a bottom to all this and start their normal over zealous cheerleading. It is frustrating because it is illogical and I hate illogical.