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9:00 AM EST, Friday, February 6, 2009. The biggest stockmarket rallies occur during bear markets. Some readers called and suggested that the government was on the way to saving the banks. And banks were once again worth buying. After all, they've come down a lot and are now "cheap." Check out my chart with yesterday's changes:

If you still think listed banks are great investments, please listen to a brilliant Bloomberg interview with Meredith Whitney. She's the banking analyst from Oppenheimer who correctly forecast today's banking mess. She says "investors should not consider owning banks at this stage." Listen to the interview. The woman is brilliant.

When asked what the the banking industry will look like in future, Whitney said, "local lenders making local loans. The simplest business model. No junk in your trunk. No loans beyond deposits."

Which brings me to today's perfect investment (a repeat of yesterday): Start your own bank. I instance Savoy Bank. Started a couple of years ago with $20 million. Now total assets of $68 million. All run out of one branch. I was thinking more of this last night. Heck, what better people to start a bank than customers of banks? We customers know what we want -- what they've never given us. And it's not difficult. A little logic. A little friendliness. A little local. All the obvious stuff. A simple business model.

You don't have to be a genius to run a successful bank. In fact, all the banking "geniuses" of recent years have screwed up. Try this one:

In early 2007, the Royal Bank of Scotland led a consortium that included the Fortis Group of Belgium and Santander of Spain. It paid $100 billion to acquire the Dutch bank, ABN Amro. Had they held on to the $100 billion, those institutions could now buy Citigroup, Goldman Sachs, Morgan Stanley, Merrill Lynch, Deutsche Bank and Barclays. And they would have enough left over to buy General Motors, Ford and Chrysler.

Mike O’Rourke, Chief Market Strategist at BTIG, wrote last night:

The lunacy of the markets never ceases to amaze. Three months ago, the investment banks were on the ropes. The market feared that they were “too leveraged”, “the business model was broken,” and “nobody knows what the business model is.” As the commercial banks remain under siege, fueled by uncertainty, their Wall Street brethren have remarkably managed to move in the opposite direction. The Financial Sector was down 30% year to date as recently as this morning, yet as of the close today, the broker-dealer index is in positive territory year to date an incredible divergence considering the environment. The positive bias in the investment banks is primarily related to two beliefs. First, that their mark to market assets should benefit from Treasury’s Comprehensive bailout expected to be announced on Monday. This is in contrast to the commercial banks, which, although having significant mark to market assets, also have significant held to maturity assets. The second reason is speculation that the investments banks will potentially get permission to buy the government out of the Capital Purchase Program preferred shares after the bad assets are sold. Only time will tell if the recovery of the investment banks will be sustained, but the certitude with which they were written off, and the impressiveness of this recovery is reminiscent of how confident the market was that Crude was going to $200 in July, only to spend the next 4 months collapsing.

Yesterday I gave Savoy Bank $200,000 for a year's CD paying 3%. In return they gave me their Statement Of Condition (fancy words for balance sheet) and two presents: a strong nylon bag and a bottle of water. My wife drank the water. I'll use the bag. No toaster, however.

Talking of banks, I love this cartoon:

Finally, don't go near the banks' CDARS program One bank offers to find you FDIC-insured CDs at other banks. The problem is twofold: The fees eat you alive. Second, the CDs they find are lousy payers. A secretary with a phone and the Internet can find better deals with an hour of research.

Madoff was attentive to his customers.
One Madoff investor called Madoff and said he (the investor) felt uncertain about the stockmarket and asked Madoff to move all the holdings into U.S. government treasurys. The next month his statement read that his monies were invested in treasurys. He's now listed as an investor in the 162-page Excel spreadsheet along with Hall of Fame pitcher Sandy Koufax. Actor Kevin Bacon. World Trade Center developer Larry Silverstein. Legendary venture capitalist Arthur Rock.

There are people who leveraged their Madoff investment. They borrowed money to give Madoff more money. Hence they're now losing their houses, their cars, their wives, etc.

The full list of Madoff has been made public in a court filing in U.S. Bankruptcy Court in Manhattan. You can read it in this PDF of an Excel spreadsheet. See if you can find your friends. The Wall Street Journal has done some cute things with the list.

Dedicated to all my friends who've recently become divorced and are now -- surprise, surprise -- lonely.

I played tennis this morning. That's why I'm a few minutes late. I plan on another seven hours of tennis this weekend. If I didn't play so much, I'd think of ways to do something stupid with my few remaining shekels.

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads on this site. Thus I cannot endorse, though some look interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Michael's business school tuition. Read more about Google AdSense, click here and here.