IndyMac bank was taken over by the Feds this weekend, and regional bank stocks continue to move lower. National City (NCC), Washington Mutual (WM), and Wachovia (WB) look like they are on the ropes with shares below $10 today. Investor pessimism is at record levels, but still no signs of a bottom.
Money flows continue to move towards metals, agriculture, and energy. As one investor has said, anything that can fall on your foot is something one should invest in today.
Dick Bove, a respected financial analyst who has been right about predicting the fall in the financial stocks has said that much of the decline in companies such as Citigroup (C) and Bank of America (BAC) has been overdone.
Unfortunately the financial stocks will not find a bottom until confidence starts to move up. Confidence will head higher when job losses shrink and end which will probably eventually occur in 2009. Until then, it will be a painful 6 to 9 months minimum ahead.
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