Posted on 03/10/2009 12:54:56 PM PDT by flyfree
U.S. stocks rose about 5 percent on Tuesday after Citigroup said it was profitable in the first two months of 2009 and a key lawmaker said he expects the restoration of the uptick rule. Citigroup's Chief Executive Vikram Pandit also said in a memo the beleaguered bank was confident about its capital strength. Shares of Citigroup, in which the government recently took a large common equity stake to help shore it up, jumped 35.2 percent to $1.42. Citi's stock has fallen about 80 percent year to date.
(Excerpt) Read more at finance.yahoo.com ...
I am not talking it down. Read what was posted. The sheer volume across the board suggests that capitulation was at S&P 700 and Nasdaq 1250. The DOW components got oversold at 7,000.
There is still high risk, but capital deployed today increased a heckuva lot. Both in the European and US markets. Look for the Nikkei and the Asian markets to feed on this. Their write-downs are pretty much done.
They got some loan loss guarantees on additional assets, where Citi agreed to take the first 10% of any loss and the government guaranteed the rest, to reassure counterparties etc, but that isn't capital. It was implicit in the FDIC anyway.
“Traders and investors jump on a bandwagon because the CEO of a company that got a bailout “said” the company was profitable for the first two months of the year?”
How many times have you seen the CEO of a public corporation say something like that in the MIDDLE of a quarter? Also, how does a CEO know he’s profitable for February in only 5 business days after the end of the month?
Could be true, but seems fishy
Hope so. But that irks me that Citi raised the interest rats on my CC because of the “cost of doing business” if they really didn’t have to. I got them to lower it back to the original APR so I can actually pay off the balance, but at the cost of not using the card in the future.
But this almost seems too miraculous considering what Citi folk and the Guardians of Esoteric Wisdom have been saying as recently as yesterday. As you say, maybe this nightmare was just a panic that is ebbing.
I wonder if the so called profit is from anticipated tax refund on the losses. Talk about double dipping.
he’s trying to help Obama, a requirement of the bailout, perhaps?
...if you don't count the balance-sheet losses, shhh...
Less than a week ago, Citi broke the buck. In another era, not so long past, they'd have been delisted from the NYSE.
Apparently American investors in general are not blessed with your unique vision and insight into the financial world.
it is fishy. I was just watching cavuto and he knows it is BS too.
He had some idiot RAT Congresscritter on there spewing the biggest BS ever spun. The guy was arguing why we need another stimulus when we are showing signs of recovery.
This is all fakey folks. The lib turds are going to say that this little turn around is not quite enough to push us over the hump.
Today, we are being played in a very orchestrated scheme to pump up Obama numbers. It is all false and depends on our stupidity.
Good luck. This is coming from a guy who bought GE at $13 because it was such a bargain.
Go read the actual 10-Qs and analyze the cash flows, ignoring all non-cash charges. Then come back here and tell me Citi can go bankrupt, by any process other than being seized at gunpoint by the government.
“Citigroup said it was profitable in the first two months of 2009”
Good news, they can start paying us back.
Steve Forbes, not a Dem in any way, shape or form, has been advocating abolishing the mark to market for some time. He has said that if this was around during the S&L Crisis, everything would have collapsed.
While I can understand it to some extent, not everything can be ‘marked’ accurately.
“Same people that call one day drops the Obama stock plunge. Neither of these day to day, or even week to week fluctuations have anything to do with the chosen one.”
Good grief....Have you been a cave-dweller?
The entire tone of this market since November 4th has been about this man, particularly since Jan 20. His policies are no-growth, tax and spend, strenuous regulations on business, cap and trade, etc. He’s picked a Treasury secretary who’s in over his head. He talks down the economy every chance he gets with words like “catastrophe” and “crisis”.....Obama is on a mission to destroy capitalism.
Thanks...sorry about GE...I had National City at a “bargain” price...until PNC bought them for about half of what I had in them.
And we are raising the interest rate due to “business conditions”. :)
Only yesterday, Citi's CDS's were trading at blowout spreads. Around where Bear Stearns' were just before the fat lady sang. They've narrowed about 55 points today but the government is even now working on another Citi bailout. Purely "contingency" of course.
Meanwhile, AIG lurks...........
Core economic activity was driven by credit expansion that reached its terminal peak around 18-24 months ago. We are now starting to see the first order effects of reduced consumption. The first segments effected have been employment and earnings in lower value added sectors, the impact of which can be measured by sub-prime mortgage delinquencies & defaults.
Next up are option ARMs and other marginal loans provided over the last 3-4 years that enabled unqualified people to purchase homes. Concurrently, we're seeing the inevitable vacancies and occupancies emerge in CRE from dramatically reduced non-essential spending.
These loans, which are are all held in various tranches of different CDO securities, are poised to begin experiencing negative servicing levels which will greatly impact current cash flows. MTM models will have to reflect prices paid for comparable L3 asset bundles held by non-banks that are suffering large redemption rates.
Without a demand driver, asset values will continue to decline, putting even more mortgages at risk of non-performance. The market is way beyond looking past assets, CDS notional values, etc. They are looking at the same cash flow numbers you are but are coming to entirely different conclusions. Until an income/debt/asset equalibrium is reached, your cash flow assumptions are subject to continued downward adjustments.
But by all means, go long.
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