No Faith in Citigroup
By Jim Cramer
RealMoney.com Columnist
3/26/2008 7:29 AM EDT
As always, it is Citigroup (C). My smartest guys tell me that Citigroup has billions in assets it can sell, that there is ample opportunity for the company to reliquify, that Vikram Pandit has things under control and the slow bleed cuts are going to work to get costs down.
Now I have total confidence in Treasury, particularly in Bob Steel, to take care of the shorts and to create brilliant shotgun marriages that reward the rich banks and punish the poor.
BUT, I have no faith in Citigroup, which because of the moronic acquisitions and bizarre off-balance-sheet liabilities may technically be insolvent. When you consider it is too big to fail, you have to begin to wonder -- what's the plan if it can't make it? How far can forbearance go? Will we tolerate this bank being majority-owned by the sheiks or the communist Chinese? Seems far-fetched, but when I read Meredith Whitney's words this morning over at OPCO I know that the losses are going to be too big for the current base of capital.
This note could not have come at a worse time, because now that Bear (BSC) is done, the shorts are going to refocus their prey, and I was hoping it was going to be on Washington Mutual (WM), which can be swallowed by Wells Fargo (WFC) or HSBC (HBC), and not Citigroup, which cannot be swallowed by anyone without choking.
Here's the thing: After the criticism that I have received for saying that it was safe to keep your money at Bear but not to own the stock, maybe I should say it is unsafe to have either when it comes to Citigroup, so I can be irresponsible on the deposit side so I don't confuse those who believe that I say the equity is safe.
When it comes to Citigroup, I simply think there are a thousand financials that I would rather own than this one and it remains my favorite short in this group after its pathetic run-up.
Random musings: We are overbought, tomorrow morning is the end of markup season. Take things off.
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Ülespoole avanevad:
In reaction to strong earnings/guidance: ZVUE +19.6%, CSUN +5.5%, PFSW +4.4%, AEHR +4.4%, VVTV +2.5%, AUY +1.4%... Select metals/mining stocks showing strength with higher spot prices: GOLD +4.6%, HL +4.3%, HMY +3.8%, AA +3.5%, AAUK +3.5%, PAL +3.0%, MT +2.9%, DROOY +2.4%, LMC +2.2%, RTP +2.0%, AU +1.5%, GFI +1.2%, BHP +1.1%... Other news: CLWR +26.8% (WSJ reports CMCSA and TWX are discussing a plan to provide funding for a new wireless co that would be operated by Sprint and CLWR), MOT +12.5% (commences process to create two independent companies), RAS +9.7% (declares quarterly dividend of $0.46; based on this quarterly dividend, the yield for the year is 26.5%), S +9.0% (WSJ reports CMCSA and TWX are discussing a plan to provide funding for a new wireless co that would be operated by Sprint and CLWR), OPWV +6.5% (still checking), WATG +4.6% (wins first supply contract from North American OEM automotive manufacturer; exceed $13.5 mln over 4 yrs), ARTC +3.7% (announces that it has been notified by NASDAQ that its review of DiscoCare has been closed), RIO +3.0% (discontinues negotiations for the acquisition of Xstrata), AKNS +1.7% (up in sympathy with CSUN), TXT +1.6% (Cramer makes positive comments on MadMoney)... Analyst upgrades: ICO +5.0% (upgraded to Neutral at tier 1 firm), TLM +4.1% (upgraded to Buy at Citigroup), WAT +2.5% (upgraded to Overweight at JPMorgan), JASO +2.2% (named Best Pick in Solar PV space at ThinkEquity).
Allapoole avanevad:
In reaction to weak earnings/guidance: JBL -14.8% (also downgraded by multiple analysts), MGI -12.0%, CHIC -10.4%, SEED -5.2%, SAI -2.5%, PBY -2.4%, DMND -1.2%, GY -1.2%... Select drug names showing weakness following WSJ report that overseas drugs hit US regulatory snags: AZN -1.7%, GSK -1.6%, TEVA -1.0%, NVS -1.0%... Select financial names showing weakness: MF -3.4%, NCC -3.3%, C -2.6% (estimates cut at Oppenheimer), CIT -2.2%, DB -2.1% (says market woes could hit 2008 profit targets), MS -2.1% (shelves sale of CICC stake - FT), LEH -2.0%, WB -1.8% (estimates cut at Oppenheimer), RBS -1.5%, HBC -1.4%, UBS -1.1%... Other news: CCU -23.2% (deal near collapse, sources say - WSJ), LFC -4.3% (still checking), BCE -2.9% (still checking), CORS -2.9% (stands at a precipice in condo bust - WSJ), AMR -1.3% (equipment issues force American Airlines to cancel number of flights - Chicago Tribune), HCP -1.3% (to offer 12.5 mln shares to index investors)... Analyst downgrades: AYR -2.4% (downgraded to Neutral at JPMorgan), PFCB -2.2% (downgraded to Underperform at Friedman Billings), CPKI -2.0% (initiated with Sell at Wedbush), CMA -2.0% (added to Conviction Sell List at tier 1 firm), ELN -1.7% (downgraded with Sell at Canaccord), HCBK -1.4% (downgraded to Mkt Perform at Friedman Billings), AF -1.0% (downgraded to Underperform at Friedman Billings).
USO lühikese positsioonide omanikele tehti täna hommikul nn short squeez ja seda Regulation SHO alusel, mis ütleb: Clearing agency participants and broker-dealers for which they clear positions (“participants”) must take immediate action to close out a fail to deliver position in a Threshold Security that has lasted for 13 consecutive settlement days by purchasing securities of like kind and quantity (“close-out requirement”)
LHV kliente, kes olid USO-s lühikesed investeerimiskonto vahendusel see ei puuduta.
LHV kliente, kes olid USO-s lühikesed investeerimiskonto vahendusel see ei puuduta.
Mõnevõrra negatiivne durable goods data on huvitavalt teravas kontrastis hommikus IFO indeksi positiivsusega. Kui on mainitud decoupling´t USA-st, siis ikka on mõeldud mõnda emerging markets regiooni või Hiinat. Saksamaa (EZ) decoupling USAst on IMO kuidagi loogilisem (ja nüüd ehk ka järjest ilmselgem). EZ ikkagi USA oluline kaubanduspartner (kuigi mõne areneva turu riigi või Hiina jaoks mõju suurem).
Pärast durable goods datat näitavad intressifutuurid suuremat tõenäosust 50 bps cutiks. USD muutub päris heaks carry paariks ;)
Pärast durable goods datat näitavad intressifutuurid suuremat tõenäosust 50 bps cutiks. USD muutub päris heaks carry paariks ;)
February New Home Sales 590K vs 580K consensus, -1.8% m/m; prior revised to 601K from 588K
kristjani lemmikkangelasi, "Hank" Paulson on jälle säravaid mõtteid avaldanud
NB! eriti järgmised väited:
10:16 Paulson says housing still biggest risk to U.S. Economy
10:16 Paulson says must let housing market correct, limit impact on economy
ja kõik öeldu järjekorras
10:16 Paulson says non-bank discount-window use for periods of 'turmoil'
10:16 Paulson says housing still biggest risk to U.S. Economy
10:16 Paulson says must let housing market correct, limit impact on economy
10:16 Paulson says Fed should 'protect its balance sheet, taxpayers'
10:16 Paulson says 'great confidence' in capital markets recovery
10:16 Paulson says supports Fed lending to primary dealers
10:16 Paulson says Bear Stearns 'found itself facing bankruptcy'
10:15 Paulson says mortgage market 'still facing liquidity'
NB! eriti järgmised väited:
10:16 Paulson says housing still biggest risk to U.S. Economy
10:16 Paulson says must let housing market correct, limit impact on economy
ja kõik öeldu järjekorras
10:16 Paulson says non-bank discount-window use for periods of 'turmoil'
10:16 Paulson says housing still biggest risk to U.S. Economy
10:16 Paulson says must let housing market correct, limit impact on economy
10:16 Paulson says Fed should 'protect its balance sheet, taxpayers'
10:16 Paulson says 'great confidence' in capital markets recovery
10:16 Paulson says supports Fed lending to primary dealers
10:16 Paulson says Bear Stearns 'found itself facing bankruptcy'
10:15 Paulson says mortgage market 'still facing liquidity'
Moodyś on kärpinud Beazer Homes reitingut ning võimalik ka edaspidine kärbe. Sama tehti Hovnanian Enterp. puhul ning väljavaated jäeti negatiivseteks.
Henno, see oli hea jah, ise ka muigasin.
BZH ja HOV on juba nii lühikeseks müüdud et enam ei lase seda teha ka, eile juba ei lasknud
Alati jääb alternatiiviks kasutada put optsioone kuigi volatiilsus on suur ning tuleks hoolikalt kaaluda oma strateegiat enne ostmise kallale asumist.
Lisaks sellele, et sellisest lumest läbimurdmiseks auto oluliselt rohkem kütust rüüpab, on nafta 'taas rõõmustamas' auto omanikke. Barrel $105 ehk +4%. Rõhub negatiivselt ka turule.
ohaqw on nagu truu koer, kes kondi peremehele tagasi toob
Eriti ei midagi uut, aga...huvitava koha joonisin siiski alla:
Fed's Evans says labor market 'weakened substantially' in February
Fed's Evans says Rising Net Exports Are Bright Spot For US Economy
Fed's Evans sees 'little or no' economic growth in recent months
Fed's Evans says inflation to moderate over next two years
Fed Evans says Must Ensure Financial Markets Function Correctly
Fed's Evans says policy 'accommadative' should support growth
Fed's Evans Sees GDP Weakness In 1H '08, Improvement 2H
Fed's Evans says fiscal stimulus package to impact 2Q, 3Q
BSC - mis toimub jälle? Millest selline hüpe äkki?
Hetkel ei paista küll mingit uudist kusagilt ja BSC-t on tõesti parem eemale hoida, kuna spekulatiivset raha nii palju sees ning risk väga suur.
Kas keegi näeb, mis RMBSi nii võimsalt üles veab?
14:59 RMBS Rambus gains as much as $6 following headline that the co won its final phase of Hynix patent infringement lawsuit; stock is now ~1.50 off highs (24.51 +5.93) -Update-
Briefingust: 14:53 RMBS Rambus wins final phase of Hynix patent infringement lawsuit - Bloomberg
tehke briefing.com Trader endale ja saate palju vastuseid ..miks miski liigub
RMBS Rambus wins final phase of Hynix patent infringement lawsuit - Bloomberg
RMBS Rambus wins final phase of Hynix patent infringement lawsuit - Bloomberg
RMBS - Rambus wins final phase of Hynix patent infringement lawsuit. Aktsia üle 31% tõusus.
BSC puhul tuli kõva ostukäive taha ja eks see pani spekulandid elavnema.