Banks Are the Bodyguards of the Markets – Darst

Morgan Stanley (MS) Chief Investment Strategist David Darst spoke with FOX Business Network’s (FBN) Liz Claman about the possibility of the Dow Jones Industrial Average closing above 13212 today, which would mark its seventh straight monthly increase, and the longest such streak in five years. Darst says, “It’s another evidence of a slight recovery, of a resuscitation, a rejuvenation, a renaissance.” Excerpts from the report can be found below, courtesy of Fox Business Network.

On whether it matters if the Dow Jones Industrial Average closes above 13212 today, marking its seventh straight monthly increase:

“It’s another evidence of a slight recovery, a resuscitation, a rejuvenation, a renaissance. But you want to watch the Spain situation. Spain’s banks need a huge capital injection. If I were the head of the European central bank , why wait for the crisis to erupt? Morgan Stanley’s folks in Europe think the house prices in Spain are going to drop another 25 percent over the next couple of years and because of the wealth effect would hurt their economy by 2 percent each year more than it’s supposed to be going down, so you want to look at the banks, property prices and the unemployment rate and take risk-protecting measures.”

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