Government Intervention

From Investors Business Daily.  {Excerpt with my highlights.}

Economy: Wall Street firms are said to be raking in the money. But don't tell investors. They're avoiding big bank and brokerage stocks — along with other industries in which Uncle Sam is involved — like the plague. 

In a Sunday story that other liberal media eagerly regurgitated, the Washington Post asserted that "Wall Street" has amassed more profits in the first 2 1/2 years of the Barack Obama presidency than in all eight of George W. Bush's.....

Fact is, stocks of money-center banks are among this year's weakest performers.  {Money Center Banks}... rank 195th among the 197 subgroups tracked by IBD. Investment brokers rank just above the bottom 20, in the 177th spot.  And no wonder. Investors are shying away from industries that are being blamed for everything from the housing crisis to income disparity and socked with regulations that have grossly expanded the federal government's reach. Estimates put the annual cost of regulation at $1.8 trillion — a dead weight around the neck of American business.

Banks and brokerages aren't only examples, of course. No fewer than 14 of the 20 worst-performing groups...are either heavily regulated or controlled by the government.  The low rank of the medical subgroups needs no explanation, what with government's imminent takeover of the health care system. Two of the three automakers have already been taken over, and look how their much-ballyhooed comeback has been greeted by the market. Their weakness has spilled over to "cousin" groups, including tire and original equipment manufacturers.  And at the very bottom of the list is solar — the industry on which the administration is putting all its (or in this case, our) money.  Now look at the best-performing groups. It is dominated by retailers, few of whom let the government tell them what to do.....

Link:   Govt Tosses Stocks an Anchor.

*Long ETFs related to certain banking indices & certain health care indices in client accounts.  In addition many of the stocks or sector mentioned here are components of certain ETFs we own for clients and in personal accounts.