And while home sales plummet in the States and foreclosures rise, at least one Aussie bank reported that it hasn’t suffered much at all from the subprime led credit crunch. “Australia & New Zealand Banking Group Ltd. (ASX: ANZ), the nation’s third largest, posted record second-half profit on new branches and increased deposits, insulating the bank from higher funding costs amid a global debt crisis,” reports news.com.au
That kind of good news bucks the trend in global banking and finance stocks. Not too many companies have been missing the chance to write down loan losses and pile all the bad news into a quarter where bad news is the norm. Merrill Lynch (NYSE: MER) joined the list of companies confessing their financial sins to the public yesterday. The biggest broker in the US wrote down nearly US$8 billion in mortgage- related losses.
Is it over? We were fast sleep during US trading. So we can’t say if Merrill’s news was the kind of turning-point event that leads to a dramatic reversal in stock prices. Recall the trading activity on August 17th, where an acute angle V looking chart marked the point at which the shorts covered and the bullies rallied.
The Dow’ chart yesterday looked more like a “W” than a “V”. Take that for what it’s worth.
The Daily Reckoning Australia