Crash Market Stocks - Financial Tips On Making Money In The Stock Market

I took a bit of a hiatus on the site during the bulk of the Christmas holiday, to spend time with the family. Volume remained very light to end the year and news was pretty minimal to the point that nothing earth shattering occurred. Anyways, I'm back and ready to take on 2010, with an outlook of good returns.

Being that we started the first full week of 2010 with a 150+ for the Dow, many investors believe we are taking where we left off. The Dow now sits above 10,500, which is well above what many (including myself) thought it would ever be by this time. However, there still exists much too many economic pressuring elements that could surprise many in 2010. With the help of government stimulus, for the time being, things have appeared to somewhat return to status quo. Few worry anymore of big bank failures, deflationary down spirals, or a even further deepening recession.

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Big banks are finding themselves in a much better this point then they were a year ago. Balance sheet transparency has been blurred, with help from government legislature giving them permission to manipulate accounting numbers to their benefit. The government has been very active in keeping borrowing interest rates low as well purchasing conforming mortgage loans. Also, bank stops have rebounded phenomenally, which has allowed many banks to be able to payback their "bailout liability."

One problem with the banks now is that not much has been learned from this past deep recession. Due to government intervention, many banks did not suffer the consequence of careless lending. All that has been learned is that if times get too tough, and your big enough, Uncle Sam will bail you out.

Now that equity is building up in the banks, the first thing most are doing is paying back TARP funds. This is not being done as a duty of responsibility or means to strengthen their balance sheets. It is more to enable the banks to release themselves from the puppet strings that come with the TARP balance. In fact, for many of the banks, paying back TARP, has only made them less willing to lend. After Bank of America paid back their share, their first order of business was to pretty much completely shut down their loan modification division. Now that their debt is repaid, they no longer need to play by the rules. They can now benefit from the 0% borrowing as well as not have to work with their struggling loans. Puffed up executive salaries can also now come back to the table. Unfortunately, the lesson of greed, and its consequences, has not been learned.

There is no doubt that lending will remain quite scarce throughout 2010. The government has made it clear of its intentions to put the brakes on the purchasing of securitized debt. Commercial lending will continue to remain slow as retail tenants continue to struggle and the job market has a slow bottoming. In fact, the commercial real estate market as a whole, will most likely struggle downward well into 2011. Residential led us into this crisis, and commercial will most likely be the caboose.

Such an environment is prime for opportunity. Potential for big gains is at the door. We have most likely not seen the last of big, volatile days. Most of the general consensus now agrees on the general direction of the market, which usually means the market is primed for a change. It is this part in recessions/depressions that can do the most damage. Happy Trading.