Asia Day Ahead: Prechter Recommends Closing Stock Short Positions
February 25, 2009 – U.S. stocks gained the maximum in a month, bringing to an end a six-day slump following the declaration given by the Chairman of Federal Reserve, Ben S. Bernanke that there is no necessity to nationalize the banks. This statement assisted in raising stocks from their lowest prices in 20 years. The United States is to obtain stakes of bank ownership if the losses go up.
Bernanke also disapproved the proposal that the authorized functionaries would utilize the assessments of balance sheets of banks as a ploy for government buy outs of the biggest lenders in the country. At a Senate Banking Committee session, he mentioned that there is no reason to wipe out the franchise value or to generate the massive legal ambiguities of attempting to officially nationalize a bank while it is simply not essential.
Bernanke stated that there is a chance of recovery in the stock market in 2010, provided that banking business becomes steady.
According to the Chairman of Federal Reserve, Ben Bernanke, the economy of the United States is in a tight situation and he cautioned the depression might persist till 2010 if the lawmakers do not adopt appropriate measures to steady the financial infrastructure.
Consumer confidence in the United States tumbled this month and home prices dropped steeply in December 2008, and this is the most recent proof of an intensifying economic crisis which Ben S. Bernanke cautioned might stay till 2010.
Robert Prechter of Elliott Wave International Inc., who recommended short selling U.S. stocks three months prior to the bear market started, stated investors must cease that stake since Standard & Poor’s 500 Index plummeted to a 12-year low.
In the Asian markets, U.S. stocks advanced the maximum in this month as banking business stocks and Citigroup stocks soared.
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