Jim (cont'd):      It now seems as though the federal government is going to favor new accounting rules that could have fabulous consequences for State Street and Bank of New York… I think the government is finally going to adopt the things that we have been talking about on Mad Money… it is going to show what is known as forbearance… that is the plan that I have been advocating all along… it is going to allow them to work out their troubled assets over time… rather than pressuring them to take losses on the books that would cause these two banks to have a severe hitch to their capital… and for banks it is all about having the necessary capital, or money, it is a Wall Street word... capital… that is the difference between survival and being forced to become a ward of the state like that Nouriel Roubini keeps reiterating now that he has obviously missed the bull boat… he is some professor who comes on and just tells you to sell everything, that was good for a while wasn’t it.

If the feds move from strict mark to marketing accounting to more model based accounting, the biggest beneficiaries actually may not be the biggest banks that have rallied so hard… it could be Bank of New York Mellon Corp. (BK) and State Street Corp. (STT)… two companies that have otherwise basically no mortgage risk… so if the accounting rules change like we except these two will soar… I know I am like a national TV show is like I am talking about mark to market and modeling, I guess I am supposed to dumb it down… no, I am not going to do it, it is too important, I know your eyes are glazing over so let me just say that mark to market to modeling accounting, I know that it is not the sexy kind of modeling… what it means is that the government has been a big bully, it has been telling the stocks, telling the banks that they have to sell a lot of stock and get their act together fast… it has been killing, all the stocks have been killing your stock… now I am seeing a change, it won’t be talked about because the government doesn’t want to say, hey, despite how much you hate the banks we are going easy on them, we are going to look the other way at their losses… no, they are not going to do that.

But trust me, it is a huge change and only a handful of people expect it… and my source, I think that they know it… now you should absolutely not by State Street of Bank of New York tomorrow… this is a slow and deliberate jail break… remember, tomorrow the President is meeting with the big bank CEO’s to talk about TARP… they are summoning the banking equivalent of the heads of the five families… a mafia reference for the Wall Street gangsters… and it might not turn out all that honky dory… why, it is very possible that all these banks that have been talking about returning the TARP money and getting out from under the thumb of big brother… will be told that they will not be allowed to return the money, cause it would cause a chain reaction of weakness for the bad banks… and the good banks would get too many good personal… in other words, it would cause havoc… that means this bank rally which has been predicated upon TARP money being returned… it is going to lose some steam… that means I expect stocks to get hit… it is not the end of the world… it is just the end of the short term bank rally… it is why I am telling you to wait until Monday when this meeting is over and the potential damage is done before you pull the trigger… and I do want you to pull the trigger because I really got a good handle on these accounting rules… on State Street and Bank of New York… buy them on weakness… because we never chase here on this show, we buy weakness,

Now State Street and Bank of New York they are in great businesses… there are all kinds of different banks… asset managers, like Lake Mace & Tiero… brokers, Goldman and Morgan… diversified banks, Bank of America and JP Morgan… those have retail, commercial, institutional… and then you have what are known as the custodian or trust banks… that is Bank of New York and State Street… these are bankers banks… these companies are custodians of other banks money and stock… what a fabulous business… they service those assets and run some of those as well.

Now, Bank of New York largest of these banks, $20.2 trillion of assets under custody… $827 billion in assets under management… it services more than $11 trillion in debt… processes $1.8 trillion in global payments everyday… believe it or not, this company is actually doing really well… I mean it is a bank and it is doing well… it gained market share in most of its segments in 2008, which was a terrible year right… got $1 new trillion in new business… holy cow… it was selected as the sole provider of a broad range of custodial and corporate trusts services… it supported TARP.. so you know the government is in these guys… the government is backing these guys… clears over 50% of the US governments transactions… what a franchise.

How about State Street Corp. (STT)?… They are the third largest trust bank… another one that the government can’t let go down the drain… $12 trillion in assets… $1.4 trillion of assets under management… the company is essentially the keeper of your mutual funds and pensions, it is of mine I always see their name… big servicer of institutional investors… your mutual fund assets are probably at State Street bank… that is where much of them are kept… they store the money, they get paid big fees for doing so.. that is a fabulous business… about 35% of State Street’s revenues come from servicing fees… oh man, clean, recurring sources of revenue… frankly I don’t see how State Street stays independent… it is that much of a money machine if these accounting changes come thru… it can’t stay independent, it is too cheap… given how consistent and lucrative their core business is.

Now, Goldman Sachs researched both of the stocks this month, telling you… you have to dump the State Street, starting to worry about the current accounting regime, they think it will crush them… I think that firm is wrong… the rules are going to get, the interpretation of the rules are going to get better not worse… in fact, these companies might even have some of their losses reversed, and booked as gains… and how much will the street love that… Bank of New York has been cut in half by this stuff… State Street by 2/3’s… look for them to reverse, and reverse hard when everyone gets wind of what you just heard on Mad Money.

The bottom line…