Harry Rady News

The Stock Market continued its downward progress after six weeks of an upward climb causing investors to speculate on what to expect in the coming days.

Despite the fact that Bank of America posted large profits for the first quarter of 2009, declaring net income triple its previous quarter, there was an overall 23% slide in their stocks value. The acquisition of Merrill Lynch added more than 3 billion dollars to its bottom line, but due to net charge-offs rising and huge credit card business losses the overall picture for B of A was not positive.

Commenting on the latest market swing Harry Rady of Rady Asset Management declared:

“The bank earnings so far just seem to be smoke and mirrors and the other companies aren’t reporting quality earnings. It’s just reducing expenses and dipping into reserves.”

For a more in depth discussion please follow the link to the full article: ‘US Stocks Lower As Banking Concerns Lead To Broad Sell-Off.’

A general downturn in small capitalization stocks was posted last Monday, April 21st, 2009. In addition to smaller, regional banks crude oil prices, metals such as copper, and energy, and materials stocks all helped contribute to the reversal of what had been a six-week steady improvement in stock market results.

The Russell 2000, which is the index of small-capitalization stocks, posted a loss of 26.88 points, which is 5.61%, falling to a value of 240.85.

Improving consistently for the past 6 weeks, the Russell increased value by over 30% since its low at the beginning of March.

Credit markets have not been improving, even with the posted gains in small caps. Corporations just don’t seem to be signaling positive signs.

“Because these earnings haven’t been as bad as feared, it’s just provided an opportunity to put on more shorts. It’s just another head fake,” said Harry Rady of Rady Asset Management.

See the full article here:US Small Caps Close Lower On Slide For Regional Banks

Taking some of the wind out of the sails of a 6-week market upturn, a wave of sell-offs in small capitalization stocks seems to have returned investors to the skittish mood they have been experiencing of late.

Banks seemed to have set the tone last Monday for small caps. Despite the fact that larger banks such as Bank of America have posted better-than-expected gains in earnings, smaller, regional banks, which operate differently than the larger, national banks, did not do nearly as well.

Adding to the already nervous mood of investors, the smaller banks traditionally depend more on real estate and construction loans whose sectors are suffering disproportionately in the current economic climate.

Because “charge-offs” are much higher than what had been anticipated, there will be a erosion in book value and reported earnings for the regional banks as a whole.

For further analysis you can read more in: ‘US Small Caps Close Lower on Slide for Regional Banks.’

Rebecca Jarvis of the popular CNBC financial news program “Closing Bell” interviewed Harry Rady of Rady Asset Management located in San Diego, California along with Alex Sanchez, the President of the Florida Banker’s association, on March 3, 2009. In wake of the “economic free fall” the U.S. economy has been experiencing, Harry Rady shares his thoughts on what creative action the U.S. government might take in order to boost the economy and help homeowners maintain economic health and security. Rady suggests in this interview that the U.S. government should initiate a 4% mortgage program which he believes will refinance all these “toxic mortgages” off the balance sheets and put between $2,000 and $4,000 into the hands of every homeowner. In response to Rebecca Jarvis’s question of how this action would help increase cash flow to small business in America, Rady responds that in order to get the economy back on its feet we must begin with the housing industry. Hear and see the interview below.