US bank rally is comic relief: earnings will fall before they recover
US bank stocks charged higher when Wells Fargo and JP Morgan reported second quarter results last week. Investors saw signs that the worst of the writedowns and losses were over. But this rally was a mere pantomime — conditions are still getting tougher and many of the banks are not admitting how bad things really are.
Like Lazarus rising from the dead, US bank stocks staged an astonishing recovery at the end of last week and into this week, adding more than 30% to their values in less than a week.
Between their highs in February 2007 and their low at the beginning of last
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