Four In Four Report

Richard Suttmeier is the Chief Market Strategist at www.ValuEngine.com. ValuEngine is a fundamentally-based quant research firm in Princeton, NJ. ValuEngine covers over 5,000 stocks every day. A variety of newsletters and portfolios containing Suttmeier's detailed research, stock picks, and commentary can be found HERE. Suttmeier's Four in Four video can be watched on the web HERE.

September 14, 2009 – TARP will not be Rolled up Because of Bank Failure Fridays Bank Failure Friday, Unwinding TARP and Conservatorship, Gold, Copper and Crude Oil, plus the weekly chart for the S&P 500 Three more banks failed on Friday bringing the total for the year to 92. This plus the 25 that failed in 2008 brings the total for “The Great Credit Crunch” to 117 on our way to my predicted 500 to 800 by the end of 2011 into 2012. All three seized banks had extreme overexposures to Commercial Real Estate including C&D loans. Corus Bank (CORS) was the only publicly traded bank and this $7 billion bank had mine boggling exposures. Corus was on the ValuEngine List of Problem Banks with a C&D exposure of 2066% of risk based capital, versus the regulatory guideline is just 100%. Back on June 29, 2006 I wrote “Regional Banks on the Fault Line” on RealMoney.com where I listed 50 institutions that could be set up like dominoes, should builders and contractors walk away from incomplete projects that are already funded. I noted that Corus Bank was covered in an article in American Banker on June 23, 2006. The article described the Chicago-based bank as taking a breather from lending to condo developers. American Banker referred to the fact that the bank had been averaging $414 million in deals each month over the past year, but announced only $50 million in May. Corus has had a policy of focusing on the "hot markets" nationwide, such as Miami. Its CD loans ratio was a whopping 267% at the end of the first quarter 2006. The stock had already taken it on the chin by 25% since peaking at $33.72 on May 1, 2006. Back then the bank had $9 billion in assets. With Corus on my Domino List why didn’t the banking regulators take action three years ago? Here’s my suggested candidate for the new US Super Banking Regulator. Treasury Secretary Geithner says its time to unwind government support of the banking system. Geithner testified before the Congressional Oversight Panel last week and indicated that the US economy was strengthening. He told the COP that the government can start to unwind some of its emergency support measures. Here’s what he said, "it is clear that we have stepped back from the brink and that we are pointed in the right direction." "We are now in a position to evolve our strategy as we move from crisis response to recovery."

With the tsunami of bank failures, I predict that TARP is extended through 2010, and that the unwinding of Fannie and Freddie portfolios will not begin in 2010 as described by the Conservatorship guidelines. While testifying, Geithner frustrated Elizabeth Warren, and any COP recommendation such as a second Stress Test will be ignored. What good is a Congressional Oversight Panel that gets no respect? Elizabeth Warren sees the risks I see. Everyone else is missing the big picture. We need a Watch Dog with teeth, not a Seeing Eye Dog on a leash. Comex Gold, Comex Copper and Nymex Crude Oil For Gold annual support is 991.7 with a weekly pivot at 1,005.7 and daily resistance at 1,031.9. For Copper annual support is 240.20 with its 200-week simple moving average at 290.72 and monthly resistance at 295.88. For Crude oil my annual pivots are $66.51 and $68.81 with its 200-week at $74.91. The weekly chart for the S&P 500 My Fearless Prediction of the Week - The S&P 500 will stay below its Ascending Wedge resistance at 1060 this week. The S&P 500 is extremely overbought and eight of eleven sectors are overvalued. Send me your comments and questions to [email protected]. For more information on our products and services visit www.ValuEngine.com That’s today’s Four in Four. Have a great day. Richard Suttmeier Chief Market Strategist ValuEngine.com (800) 381-5576 As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.com. I have daily, weekly, monthly, and quarterly newsletters available that track a variety of equity and other data parameters as well as my most up-to-date analysis of world markets. My newest products include a weekly ETF newsletter as well as the ValuTrader Model Portfolio newsletter. I hope that you will go to www.ValuEngine.com and review some of the sample issues of my research.

“I Hold No Positions in the Stocks I Cover.”