Bear Earnings Bad, Market Response Good


Stearns’ earnings today were atrocious. Never mind the fact that sales and

trading revenue slumped by an eye-popping 88%; Bear also, uniquely, saw its

investment-banking revenues fall as well.

Interestingly, the bank’s stock

is unchanged in early trading, and a good 15% above its lows of last month.

I don’t buy the argument that this is because of the announced share buy-back;

more likely, it’s a bit of a short-squeeze on speculators who strongly suspected

that Bear would fall short of expectations.

And there’s another aspect to the share price, too: there’s simply more confidence

in the financial system now than there was during the darkest days of August.

Given that Goldman Sachs is doing so astonishingly

well, I still – for the third day running! – have a


that some kind of corner has been turned.

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