There's Washington and then there's everywhere else. That's I felt when the nation's top bankers were being raked over the coals Wednesday for what was often the sins of their fathers -- or at least their predecessors from 10 years ago.
That's right -- on a day when the market yawned, we had the prospect of CEOs Jamie Dimon of JPMorgan Chase (JPM) , Brian Moynihan of Bank of America (BAC) , Michael Corbat of Citigroup (C) , David Solomon of Goldman Sachs (GS) and James Gorman of Morgan Stanley (MS) (among others) having to explain how their institutions are standing in the way of progress, jobs, loans, motherhood and apple pie.
There was a time when these hearings would have been more than great theater. There was a time when America really was in crisis in large part because of some of these banks -- but more important, because of some banks that have long since left us.
The time to soul-search to me was when the regulators who are supposed to protect us from rapacious and reckless capitalism failed to do so and we never asked why. We never hauled any of these so-called "protectors" up and skewered them like Congress skewered top bankers on Wednesday. Top bankers who perhaps didn't lead or had nothing to do with their banks' history during the Great Recession, unless you want to talk about how Jamie Dimon saved two failing banks at the government's behest or how James Gorman purged reckless businesses well before he had to.
More important, to listen to these congresspeople is to believe that these bankers should have voluntarily turned themselves over to federal prisons for things they might or might not have done. Maybe they should have booked rooms in the Butner federal prison -- perhaps in a wing adjoining Bernie Madoff, the biggest swindler of a generation.
Actually, it's a branch-of-government thing. Maybe our congressional representatives don't know that you actually have to be prosecuted before you report to jail. It isn't all voluntary.
Yep, our country's nut-job founding fathers even came up with this Fifth Amendment thing that says alleged crooks aren't even allowed to incriminate themselves. Incredibly inconvenient when you think of it.
Do some of the bankers of that doomed era belong behind bars? You bet.
But should any of those bankers who were verbally drawn and quartered on Wednesday be spending some time at Shawshank Prison? The worst I can say is that at times, some were obtuse (like the warden at Shawshank), but no worse than that. Yet no one was unscathed -- least of all, Washington.
Now, I'm not denying banks' importance to our economic system. Our country doesn't run on barter, it runs in credit. But since the Great Recession, I've come to rely not on banks but on companies themselves to take care of themselves.
When I look at the S&P 500, I see a gigantic swath of companies with balance sheets that are a heck of a lot better than the federal government -- including many that, given Uncle Sam's insane budget deficit, I would gladly lend to more than I would the U.S. government.
All that said, let me tell you where we are with this market.
We are on the cusp of earnings season. Sure, we have an investors' meeting Thursday at Walt Disney Co. (DIS) that could be huge for that iconic company.
We also had important earnings from two companies -- Delta Air Lines (DAL) and Conagra (CAG) -- an airline and a food company, and they were stupendous, the first unexpected because it had preannounced good earnings and these were much better and the second a total shocker as Conagra had been beaten down by a bad acquisition that's now turning more positive as they said at their analyst day.
But Friday? Friday we are going to start to hear from these same bankers and we have to hope they are given a better chance to tell their story and that they will tell a better story than they were today.
What exactly do we want to hear?
First, we need them to say that despite the slowdown that caused the Fed to pause its rate hikes they are still making a ton of money with your deposits.
Second, we need to hear that corporations are still expanding even as they did hit the pause button when the stock market cratered because of Jay Powell, although they won't single him out because he is their chief regulator.
Third, we want to hear that there is no pick up in bad loans, something that's a sign that we are going to go into a recession, which is, of course, what we all know the fabled inverted yield curve is telling us.
Finally, we want to hear that the consumer is alive and well and spending.
For that, let me give you a preview because I spent much of the day at the J.P. Morgan Retail conference hosted by Matt Boss and all I can say is that I liked almost everything I heard.
Over and over again I got to listen to CEOs such as Michelle Gass from Kohl's (KSS) and Mark Butler from Ollie's Bargain Outlet (OLLI) -- both of whom you will hear tonight on Mad Money ---say that the consumer is upbeat and open to bargains whether it be in apparel, or toys or housewares on consumer packaged goods.
There is a difficult calendar issue for those companies with more exposure to Easter gifts than others as Easter fell on April 1 in 2018, so the comparisons are skewed. You bought those gifts in March of last year and this year you buy them in April so the month over month isn't that attractive. Plus, February was awful because of the weather. But I believe things have shaped back nicely and many stocks in the sector are buys.
So many of these stocks went down Wednesday that it is almost counterintuitive because it very well may be where the best bargains are.
Where did the buyers go instead? Where do they always go when they have instincts that the economy is slowing? To the techiest of the techs, the cloud companies known here as kings, stocks like VMWare (VMW) , Splunk (SPLK) , Workday (WDAY) and ServiceNow (NOW) , all of which, somewhat bizarrely were up four points.
They went back to the biotechs, which had languished for the last couple of days.
And they fell back on FAANG, of course, with Apple's (AAPL) performance being the most impressive, with Apple's performance being the most impressive given that it caught a downgrade based on overhyped expectations for the service revenue streams.
Facebook's (FB) stock keeps climbing as is warranted when you hang around retailers because they know that customers want to buy what the influencers and the thought leaders tell them they want to buy. Hey, it may be revolting but it's how it works these days as anyone who has watched the stock of Estee Lauder (EL) climb ever higher because it sure helps when non-paid influencers say they like something.
On days like Wednesday you have to search for the disappointments and it isn't hard because the only truly disappointing stock was, once again, Lyft (LYFT) . I know early last week Morgan Stanley MS was blamed, I believe incorrectly, for allowing some owners to go short the stock against their own locked up positions, something that Morgan Stanley has categorically denied.
All I can tell you is that Lyft is making it so my biggest worry, that these IPOs would suck up a lot of free capital, might not occur. Yes, I think that Uber will have buyers. It's true that Levi Strauss LEVI tells you deals don't have to fall apart at the seams and I think a stock that goes down six points after being down hard the other day, as Lyft was, is a fallen apart operation.
But the main takeaway of the day? The bankers are still regarded as gangsters on Capitol Hill. I just want them to put on a good show in 48 hours. If they do, all will be forgiven, if anyone but a bunch of nostalgic legislators blames the weaknesses in the economy on them. Stock skeptics? You don't have to like them. You just have to like their numbers.