C$ off its highs, indices topping..banks taken care of

I quote Rep. Spencer Bachus (R-AL)who says “my view is that Washington and the regulators are there to serve the banks.” Certainly this is in line with William Greider's "Secrets of the Temple", which was our breakfast reading last fall. 

Yesterday's news was of increased hiring by the private sector: to-day's that jobless claims are up anyway.

Many big banks (as well as brokerage houses) make money  from trading commissions, which have been hurt by the 16% drop last year in trading volumes (they are 24% below 2008 figures). Investors took 80 billion out of their 4 trillion in stock and shifted $250 billion into bonds in 2010.

It was a good year for company profits, and a second year of rising stock markets, which was generally not predicted back in Jan 2010.The NY Times now says the past  year's profits generally were bolstered by job cuts and restructuring rather than by revenue growth, an approach that may not have much further to go. 

Nevertheless, there is apparent investor enthusiasm  that the Bush era tax cuts were prolonged, and that a further 600 billion was pumped into the system by the Federal Reserve in November. Surely the banks will be saved!

Our bank holdings are MS, BTC, and AIB....very small amounts of the last two. BTC  could be a turnaround (up 24% this morning, and still deeply underwater for me) I have AIB long term call options, a risky bet suggested by Chris that the Irish pension fund will not disappear. MS is what I call a "steady honker", which John had the chutzpah to buy at the very bottom of the '08 crash and to use profitably in option trading while it was volatile.