More bad news in banking, which means great news

To be honest, it doesn't make any sense to me either. Last week a string of big financials including Washington Mutual, Merrill Lynch, UBS and JP Morgan all choked and announced that they were hitting the streets yet again, begging for more cash. Just a week prior to this news, executives were pooh-poohing any rumors of begging for cash yet it happened for the second time in just a few months. Now Royal Bank of Scotland is set to do the same and somehow the market sees this as a good thing. Really? Do tell, because taking hat in hand for billions plus chopping staff over and over and over strikes me as a very bad sign.

I'd like to be wrong on this but when markets react in a way that makes no sense this often means common sense is about to strike. Analysts typically see a second bottoming out in any recession and to date we have only experienced one hard fall and it's difficult to argue against the US being in a recession. Don't believe the Wall Street hype because the US will not be out of the woods until 2009, at the earliest.