The story going around trading desks is that the Treasury Department is about to announce plans to sell its stake in Citi (C).
Trading in sympathy with these are Fannie Mae (FNM) Freddie Mac (FMC) and AIG.
As Peter Boockvar notes, just one day after slowest day of year, we get the busiest day in a month.
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
"Overall household indebtedness is up from $7 trillion to almost $10 trillion since 2000. On this sum, we estimate, the American consumer has an annual interest bill of more than $500 billion; a sum, by the way, that vastly exceeds his current income growth." —Kurt Richebacher
Knowing that the vote over the weekend in Greece was really a referendum on Euro membership, a majority of the Greek Parliament said yes to staying. European Finance Ministers meet again on Wednesday to solidify the 2nd bailout package for Greece at the same time hopefully a deal is consummated between Greece and its creditors this week. The Greek 14.5b euro bond that matures on March 20th is up by 2 pts. The optimism that all will be completed and contained AGAIN to Greece has yields lower in Portugal, Spain and Italy. The iTraxx Financial Index is also narrower by...
read more »
Tweet
Facebook
Reddit
Digg this!
March 9th, 2010 at 4:38 pm
SPY volume was tracking at a run rate of ~ 130 MM sh on the day until the 2:30 selling. My model suggests that intraday sell off came with about a 20 MM share surge above what would be expected. All anyone can do is speculate, but that selling seemed to come with several coincident events, all intraday – dollar bounce from previous support, selling in materials sector, SPY closing gap from 1/19-20. The end look is still up on decent , but not breakout, volume.
March 9th, 2010 at 5:04 pm
Here’s what started the move:
March 9th, 2010 at 5:35 pm
Sell to whom?
Or is there really a market out there for a crumbling, inept financial behemoth without profits, whose balance sheets contain suspected-but-unknown horrors, hidden by the wrapping of mark-to-model, and whose shares have value only by virtue of the constant day-trading hacky-sacking they have received for about a year now?
March 9th, 2010 at 5:36 pm
Highest capial ratios based on assets marked to what? case closed. when are people going to realize that a mark to model by a vested interest (the bank itself) is a joke? does anybody here really believe banks assets are marked reasonably?
on the citi matter, jpm pulled the borrow on c and aig then reversed course.
irrespective of the squeeze, lots of people buy lottery tickets and lots of people are suckers for sub 5 buck stocks, particularly when the hyperdrive propaganda machine is frothing at the mouth. rolling out a.j. cohen today was hysterical and cramer’s blog strongly advised retail players to get in the market.
the ponzi is alive and well. has anybody bothered to remember their history and read the history of the times before they were alive? looking forward to coming back here when the spx is back in the 800s this year (caveat: the fed keeps trying to prop but it will ultimately fail) to ask if anybody is surprised.
March 9th, 2010 at 5:47 pm
I guess that Bruce Berkowitz is going to belly up to the bar. Good Luck with that. After all that has gone on, how can he believe the fables he is told about the “quality” of Citi’s assets? Has he had his own team inside Citi, scrutinizing the quality of those assets with a fine-toothed comb?
After all, it’s not as if the US Treasury has any reason to lie to him is there? IS there? And if they did, could he reasonably expect to be able to sue them?
He’s wrong about people being focussed on the liabilities — people are focussed on the unknown/unknowable magnitude of those liabilities.
Personally, I don’t believe the financial statements of ANY finance company, and will not put a dime of my own money into one, until such time as the proprietors of the Bananamerican casino give the marks walking in off the street better odds against being taken to the cleaners.
I’m certain that I’m not alone in this, and yes, that will offer exceptional opportunities to those of much greater expertise and knowledge about specific “opportunities”. Quite a similar phenomenon exists in the penny stock world. And I don’t do business there either.
If the goobermint wants a market in financial companies, it had better begin implementing some rules that instill faith in the system, as opposed to faith in the fraudulence.
March 9th, 2010 at 6:03 pm
So a huge owner of something (the Treasury) announces that they are going to become a massive seller of something (C stock) and said stock goes…up? Mmm hmm. As the saying goes, only in America.
March 9th, 2010 at 7:39 pm
“. . .yes, it’s still swimming in toxic assets.”
Enough said.
March 9th, 2010 at 8:11 pm
A “BR” ALERT…about that Roosevelt Conference! (Which was an Excellent Watch) …. Danny Schechter Comments on it:
———————
Fears Of A Second Crash Are Real, But Congress Lacks Appetite For Action
by Danny Schechter | March 9, 2010 – 10:53am | permalink
What will it take? What are they waiting for? What part of the reality of a systemic crisis that will get worse don’t they get?
How is it possible that after near three years of economic turmoil, with possibly hundreds of TRILLIONs down the rabbit hole–not that anyone is counting or apparently can count–that the geniuses who run our economy still don’t “get” that the sh*t has already hit the fan? How many more jobs and homes have to be lost?
Michael Moore is not the only one predicting a second crash. Paul Krugman is all out of words excoriating the Administration for its tepidness. Nouriel Roubini, who forecast the first meltdown, now says we are in serious danger of a “double-dip,” a lethal combo of rising inflation and deeper recession.
This past week, the Roosevelt Institute sponsored a conference over at the Time Warner Center called “Make Markets Be Markets” (Makemarketsbemarkets.org), published a book of essays and heard from a who’s who in the world of influential economists and analysts who gave high powered presentations, one after another, each more lucid than the next.
There was enough brainpower in the room to save the economy, but, alas, no one seems to be listening. Some business media were there collecting sound bites, but the urgency of the warnings did not transcend the limits of the bubble of financial journalism.
Read More at……
http://www.smirkingchimp.com/
March 9th, 2010 at 8:32 pm
Why is it said that when one stock jumps higher on potential news, and others in the same sector also move up, its called moving in sympathy? Shouldn’t someone change it to moving in jubilation?
Anyway Freddie Mac is FRE and C also got a bump from a technically bullish looking chart. C had been up the past three days and price moved above 50 EMA on Friday. MACD has also crossed over. The Rumor may have directed more traders to check out the chart.
http://stockcharts.com/c-sc/sc?s=C&p=D&b=5&g=0&i=t32357847838&r=8205
I’d expect another pop tomorrow. $4.10/$4.20 range but the 200EMA @ $4.35 will be too much of a nut to crack at least for now.
March 9th, 2010 at 8:41 pm
Not as good a chart, but still shows the bullish movement.
http://www.stockta.com/cgi-bin/candle.pl?cobrand=&symb=C&size=analysis&support=3.14,7,3.32,5,3.48,14,3.69,2,3.87,5,3.98,2,4.13,2,4.29,5,4.84,3,5.00,2&trend=
I also feel that when the CEO was questioned on Friday, he looked cool, calm and upbeat about his company. Investors liked what he had to say. JMOP
March 9th, 2010 at 8:46 pm
I saw a rumor somewhere that the US is going to ban short selling in the companies it controls and that was the basis for the bounce. Banning short selling still wouldn’t force anyone to buy any of those turkeys and the price could sitll sink, but most of the rubes don’t think that far ahead.
OTOH, maybe Geithner is spreading favorable rumors as part of a pump and dump. He needs to practice that maneuver for his future GS position.
March 9th, 2010 at 11:05 pm
Thank you OnlineBrokerReview – I thought I was going nuts or something.
That makes two of us who question a rally on the announcement of a huge seller.
Good for Geithner if he can get C and the others out at better levels.
March 9th, 2010 at 11:34 pm
probably they have tax assets (accounting miracle…)
March 10th, 2010 at 1:23 am
Trying to figure out the value of common stock, preferred, outstanding warrants, TCE or Tier 1 ratios for Citi requires an army of accountants and 50 psychic palm readers. The walls are moving, the rug might get pulled out from under it, or it may be put in a protective incubator for perpetuity. 3.60 a share, 0 or 20 bucks share depending on how the wind blows…
March 10th, 2010 at 2:09 am
If the economy actually improves as it looks like it will as of now, then Citigroup should easily go to double digits over the next couple of years.
I was actually expecting it to hit 7 in 2009, but never happened. It lagged many of the financials. But it looks like its time has come as it started moving now.
time123
Invetrics called the bottom in March 2009: http://invetrics.com/?p=973
March 10th, 2010 at 6:28 am
Invetrics called the bottom?
That link forecasts a 10% rally AFTER the bottom, after a one day 9% move:
March 10th, 2010 at 6:48 am
In the early afternoon a rumor that the US would prohibit short sales in any security that it owned – AIG, FNM, FRE, C – propelled those stocks into the ozone layer.
The usual financial media dolts then proclaimed that Citi was grossly undervalued. Later, Citi announced that it would issue $2B in TRUPS.
March 10th, 2010 at 9:44 am
Deadhead, constantnormal –
You guys are reading financials (and the recovery) completely wrong. Watch for credit loss write-offs to drop across banking in Q1/Q2. Then run the numbers to what EPS will be in a “normalized” environment with the losses from underwriting in 2005-07 written off. The answer is 2x to 5x across most major bank stocks. Thats pretty good upside. This is what a recovery looks like.
In a strong recovery the upside is even better.
Short trade was the right idea in 2006… its over.
March 10th, 2010 at 9:50 am
Its funny… didnt I argue with MOST of you about US Govt “bailout costs”.
I think these are fake because 1) the US govt LENT the money at 5% + warrants. 2) they are almost ALL paid back, especially across major financials. They SPENT exactly ZERO. The GAVE bailouts of $0.
Now they hold $25B in C stock at $3.25. The govt is already up $5B on that and may end up making $10-20B on the stock. (They already made interest and warrant money on the other money in C).
Looks like AIG (which sold $50B in divisions in the past 2 weeks) will also not end up costing the US govt anything. So were down to Fannie/Freddi (govt entites) and GM/Chrysler (auto).
Can I get you guys to lay off the major financials? Put the focus where it belongs — govt waste, healthcare, war costs, and failed companies — AIG, GM/Chrysler, Fannie/Freddie, small banks that lent corrupt bad loans, etc.