Random Thoughts: The Citi Pity Party
The banking drama continues to unfold.
Editor's Note: The following was posted in real time on our premium Buzz & Banter. It's being shared here for the benefit of the Minyanville community. See also The Age of Austerity.
Gate Sniffage! - 9:55 am
- Nyet! Russia is halted again. Just as the U.K. was a precursor to a short-sale ban, this could conceivably become a stateside situation.
- We're gonna push Jeff Cooper's Daily Report outside the firewall today as it's a must read for Minyans.
- I went home with some Weatherford (WFT) calls last night. Nuttin' crazy, mind you, and picking spots, not picking bottoms. In the interest of full disclosure, they're held for sale.
- I applaud the Wells Fargo (WFC)-Wachovia (WB) deal, if only because it scores one for free market sans government capitalism. As I wrote this morning, however, it could well mean that Citigroup (C) will become "un-circled." The credit default swaps seem to agree.
- And yeah, I'm happy I'm not size short the wrong side of a Wells Fargo bet again.
- Minyan Peter brings up a massively strong point. In the age of global acrimony, it makes intuitive sense for European economies to fragment, leading to the demise of the Euro. That's a serious twist in the dollar discussion.
- How do I know it's Friday? A finski of coffee cups are sitting in my kitchen sink (my morning Nespresso habit and not enough time to clean) and NWA has been in my head five times this week. When me and my Minyans step in the house...
- Good luck yo--let's end this freaky week with some jingle in our jeans and a smile on ye puss.
Pulling Muscles from a Shell! - 10:30 am
- Oh joy, earnings season officially starts next week. I would rank our four primary metrics as 1) Structural (credit), 2) Psychology (social mood) with technicals and fundamentals tied for a distant fourth.
- Still, respecting the process, I would remind Minyans that field position matters into earnings (or, at least they do in free markets). Good news that's not great is sold in overbought markets and bad news that's not horrible is bought in oversold markets.
- Yes, I'm offering out some Weatherford (WFT). Just trading.
- Keep the Citi Pity Party front and center. The government needs another headache right now like I need another brownie. There are headlines that the FDIC "stands behind its previously announced agreement with Citigroup (C) and will be reviewing all proposals... to pursue a resolution that serves the public interest."
- Define public interest please? I mean, Wells Fargo (WFC) is saying it doesn't need government assistance because it ran its business efficiently and can absorb the toxic shock at Wachovia (WB).
- Citigroup, meanwhile, needed government backing (and, in its defense, had a deal and has been dealing with Wachovia)--but who's saving who here? Was Citi saving Wachovia? Was the government saving Citi? Who's saving who and who's getting zoomed?
- Societal acrimony indeed.
- California knows how to party but who's gonna pay the tab?
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
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