By Adam Lass
Everything you really need to know is published below the fold. What’s really going on. Who’s lying to you. Who’s going to fail next. And how to capitalize on their nonsense. Everything.

This concept harkens back to the bad old days when I still lived in the Big Apple and newspapers were made of, well, paper.

Each morning, I would hit the local newsstand for a copy of the Daily News (the Times was a deeper read, but it weighed a good bit more, too, and really was more suitable to hard, end-of-day thinking).

Then I and thousands of my very close personal friends would cram ourselves armpit to elbow into hot lurching subway cars for the ride downtown.

There we would hang on, one handed, to leather straps or wooden handles (later stainless steel, but where’s the joy or mystique in that) and attempt to take in the morning’s critical news.

Knowing that straphangers all folded the paper in half, publishers took to putting the most lurid headlines and leads above the fold. Grotty, boring, critical, details went below, and sports on the back cover.

Being a bit of a contrarian, I have always made a habit of starting below the fold, and I suggest you do the same.

Today for example, “above the fold” may very well be the cable TV talking head or corporate news Web site shouting at you about the global rate cut that most every central bank in the world just executed.

This is not quite the shocking event it is purported to be, as our own Fed Reserve Chairman, Helicopter Ben Bernanke, has been telegraphing his punch for days now.

I will say that the global scope of this move is impressive enough. ’Course, you would have to read on a bit to know that even China’s central bank cut their interbank rate by 27 basis points.

But even that is not the real item you need to pay attention to in today’s paper. That is buried deep below the fold, where Wall Street’s cheerleaders hope will completely overlook it.

I am speaking of Bank of America’s (BAC:NYSE) complete capitulation to the global recession. We are talking white flag here. Full-blown dishonorable retreat.

For months, Wall Street’s cheerleaders have quibbled as to how there wasn’t really a recession, just a few slower quarters; and how as one of America’s biggest banks (perhaps the biggest these days -- it’s so hard to tell anymore) BoA was uniquely positioned to ride out this short-term credit storm.

And then suddenly, two weeks before they were due to report, and on a day when the headlines above the fold were certain to distract readers’ eyes, BoA execs tried sneak out the fact that third-quarter profits were down 68%.

And that they had to set aside an additional $6.45 billion against further mark-to-market losses. Oh, and they are halving their dividend.

Wait wait, there’s more: They now completely concede that we are headed into a recession of epic proportions. And to raise enough capital to stay afloat, they are forced to dilute shares with an additional $10 billion offering.

Now one would think that this should shock a few folks who haven’t been paying attention, or are unable to add two and two. Could there truly be anyone who didn’t see this coming?

Apparently there were more than a few investors who were indeed fooled by BoA’s smoke screen, because BAC shares had more than doubled in price since July, which is when I advised readers to buy puts against this stumbling giant.

Indeed, this position looked rather forlorn this summer, when everyone was reading above-the-fold headlines claiming that Washington could and would always cover Big Banking’s naked rear.

Now we know different. Now we know that even the trillion dollars that Washington is raining down on Wall Street is probably still not enough to prevent a marked economic downturn.

And if you turned to the very middle of your paper, or Web site or whatever, where the option and stock prices are listed, you would see that BAC shares are flirting with their 52-week (and five-year) lows again.

And those put option contracts I begged anyone who could add and subtract, and could read the real facts to buy? They hit 214% gains this week.

The devil is always in the details, folks, and the details, the truth, and the profits are always to be found below the fold. 

Adam Lass is Senior Editor, WaveStrength Options Weekly
Courtesy: www.taipanpublishinggroup.com