While mgt seems to have told the world that their March quarter isn't so bad, balance this against recent developments: #1 The new administration seems to be working towards legislation allowing them to take down large financial institutions, into their firm power, such that the institutions can't cause headlines a la AIG. If the gov't succeeds in this communist endeavor, instead of just letting financial institutions pass or fail via the market (yes, allowing runs on the banks is the equivalent of a self-healing forest fire and would quickly expose GOOD banks as survivors, quickening the healing process before hyper-inflation makes us all poor), big financially-related company stocks will be under new pressure of going to zero instead of being bailed out as in the Bush and first days of Obama administration. The new administration and Congress will effectively increase the risk of owning financial institutions which possess scary balance sheets by pushing the risk price to zero. This hurts a company like C. #2 The DIRECT attack on employees of gov't-"saved" institutions is causing weaker financial companies to lose good employees and that puts pressure on profitable divisions. If you knew how to make money trading ANYTHING, would you rather work for AIG where you get nothing or are taxed 100%, or a bank with a chance of survival? Thus, the gov't is shooting itself in the foot to save taxpayers less than $165mm, whilst it boosts Federal Reserve by trillions! Messing with the Federal Reserve will end up destroying the dollar, and wasting tons of taxpayer money WELL beyond a measley hundred million of bonuses. Not to mention the destruction of free markets in the next 100 years which new laws made in brash manner today will cause.
$3.06 (03/24/09)
