If you enjoy the content at iBankCoin, please follow us on TwitterOn CNBC’s “Closing Bell” FM contributor Jon Najarian told Dylan Ratigan he sees a catalyst out there that could lift banks [XLF 6.89 -0.09 (-1.29%) ] as much as 100% – and as soon as next week.
The catalyst involves mark-to-market accounting; which has been blamed for forcing banks to record billions of dollars in writedowns.
According to Reuters, a U.S. House Financial Services subcommittee is expected to hold a hearing on mark-to-market accounting rules as soon as March 12. The SEC’s chief accountant and the chairman of the Financial Accounting Standards Board, will be asked to testify, the report said.
If that meeting results in the government relaxing mark-to-market rules, Najarian thinks the stock market could explode.
He says, “if the government relaxes mark-to-market for 12 to 18 months you could see financials move 100% in a matter of hours.”
And he goes on to say, “In fact, I hope you’ll replay the soundbite because if the government relaxes mark-to-market accounting a number of banks stocks will be unbelievable values at these levels.”
But that’s not all. Najarian thinks the move could not only light a fire under banks, but the entire market. “If that Reuters report above is right there’s a very good chance the entire market will get a big lift.”
Again, the date to watch is March 12th.
Joined Feb 3, 2009
1,759 Blog Posts
And if it does get a lift from that, I will short the snot out of the entire market – AGAIN.
But really, nobody should pay any attention to either Najarian.
I agree. It’s actually “cheap” way of the government engineering the banks getting out of their problems. When i say cheap i mean that everyone would be paying for it because the Fed will have to keep rates low so banks bank enough margin profits and their assets may hold up.