Monday, December 13, 2010

The Great American Wikigeek Bluff

originally published:

Wikileak's lead geek, Julian Assange made the threat that he intends to release information that will bring down a large American bank or two. Provided his success in terrorizing governments with the same rhetoric and actions, Assange's statement is being taken seriously by the financial sector. The media discovered Wikileak's earlier suggestions that they have an entire hard drive of data on Bank of America (NYSE:BAC) that they plan on making public. This finding has made many believe it is Bank of America (NYSE:BAC) that is the specific target of Wikileaks. However, Assange has never specifically named the institutions involved in his banking sector threat. Despite the nebulous nature of his statements, Bank of America (NYSE:BAC) shares retreated when the rumor first hit the wire. In fact, according to Fox Business Network's Senior Correcpondent, Charles Gasparino reported that Bank of America (NYSE:BAC) has set up a war room to deal with any potential fall out from the threatened Wikileak releases. Supposedly, this war room is concerned about the Countrywide acquisition in 2008, mortgage creation, and the Merrill Lynch deal.

While these three situations are sketchy, there isn't much we don't already know. The stock market appears to shrugging off Assange's threats as the financial sector has been on sharp move higher since the initial rumor hit the Street. The only way this threatened data dump will have any effect on the stock market is if the information is truly shocking. I mean nuclear bomb level material. I strongly doubt that this is the case, thus believe Wikileak's is bluffing about the severity of what they have. We have been through a lot with the financial meltdown, its going to take tremendously shocking news to create further ill effects. Smart investors will use any Wikigeek rumor driven pullbacks as opportunities to buy in the financial sector. As the famous Wall Street axiom states, sell the rumor, buy the news.

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