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VIDEOFive Things You Need to Know: When in Doubt, Blame the Shorts
By
Kevin Depew
Mar 05, 2010 12:45 pm
Pandit says Citigroup owes debt of gratitude to American taxpayers -- then blames everthing on short sellers.
1. Pandit Blames Citigroup Woes on Short Sellers
Vikram Pandit, chief executive of Citigroup (C), took time out of his busy schedule running the nation's moneyest-losing bank to stop by Capitol Hill yesterday and thank US taxpayers for their generosity, however unwitting it might have been, in bailing out the bank he runs.
Pandit told the Congressional Oversight Panel, which monitors the bailout program, that the bank owes a "large debt of gratitude to the American taxpayers." Then he blamed short-sellers for everything.
Citigroup lost $1.6 billion last year, and $27.7 billion the year before. But who's counting? Apparently, no one; otherwise, how else could you explain the fact that the bank's compensation committee, lauding Mr. Pandit's performance in a letter, claimed it "merited an incentive award." To his credit -- heh, credit, inside joke -- Mr. Pandit declined the compensation bonus because of his pledge in February to take $1 a year until the bank becomes profitable.
But let's get back to blaming the short sellers. “There were a number of instances post the Lehman collapse ... where the markets were not really functioning in a rational way -- they were frozen,” Mr Pandit said. “There are ways that fear overtakes it and that’s the tool that short sellers need to make money.”
Unlike Mr. Pandit, we don't need to speculate on the fundamental or technical causes of Citigroup's shoddy stock performance and blame everything on some nebulous cabal of "short sellers." We can look at the data.
CLICK TO ENLARGE
Since taking over as CEO on December 11, 2007, Citigroup stock is down 88%, compared to -22% for the S&P 500 and -47% for the KBW Bank Index, which no doubt has lagged the S&P 500 so severely because of Citigroup -- it's second-largest weighting in the index behind Bank of America (BAC), which incidentally, is down 60% over the same period. Damn, short sellers. As well, over the course of the 27 months Pandit's been at the helm, the stock price has only closed up month-over-month on 12 occasions, less than half the time.
It seems the only thing short sellers need to make money is for Mr. Pandit to be in charge of Citigroup.
2. The Looming Crash?
A lot of smart people are worried about a coming crash in the stock market. Some have even pinpointed a date around the March 15 as showing an increased likelihood of there being a market crash. Josh Lipton wrote about this yesterday, but I wanted to follow up with where we are in DeMark terms.
On a quarterly basis, the TDST Down level of importance is 960.84. The break from the fourth quarter of 2008 remains disqualified.
Monthly, we're on the second bar of the 1-4-bar window following the TD Sell Setup in January, which recorded below TDST Up resistance. That gives us a window of about 11 more weeks for the sell setup to manifest.
Weekly, we're on bar 12 of a potential 13 sell signal. We "need" a high above bar 8 sometime within the window provided by the monthly sell setup to record a high above the close of bar 8 (1144.98) for the sell signal to record.
Finally, on a daily basis, the TDST Up level resistance is 1050.23 and we're currently on bar 5 of a potential sell setup that records next Thursday if the close is above today's close.
Longer-term, I don't care about a crash. It's only for traders speculating to be concerned with. What I see is that over the past decade, moves below 800 have been very short. Even if we drop to 400 -- and there's a non-trivial possibility we could do that -- then those with time frames similar to mine, exceeding 20 years, are better off hoping for a crash than worrying about one.
3. Popular Science Opens Up Entire 137-Year Archives
Popular Science magazine, the American periodical founded in 1872, announced it has partnered with Google (GOOG) to open its entire 137-year archive for free search. There are plans to add more advanced search functionality in the future. Below is a 1985 issue on the search for extraterrestrial life.
Students of socionomics can find a wealth of information in these back issues simply by looking at the period advertisements in each issue.
ADVERTISEMENT HERE
4. Speaking of Popular Science...
Digging through the Popular Science archives, I was reminded of something I stumbled across a couple of years ago via Wired magazine: Peter Thiel Explains How to Invest in the Singularity.
In that 2007 piece, Bryan Gardiner outlined the views of Peter Thiel, co-founder of PayPal, which was later acquired by eBay (EBAY), and president of Clarium Capital Management, on "the coming singularity." That's so 2007! Here we are three years later and few are talking about the concept of the coming singularity now. What happened? A couple of things, each related to social mood as the driving force behind the worldview that the coming "singularity" would drastically shift our lives.
First off, singularity refers to the hypothesis that we're entering a new era in which the very nature of what it means to be human will change, all due to the challenges presented by a rapid escalation in new technology. The futurist Ray Kurzweil is perhaps most closely associated with this view, and indeed Kurzweil has a movie about singularity, The Singularity Is Near slated for release this year. So it's not as if the notion of singularity has disappeared from the radar of futurists and scientists, just that it's receded from public consciousness -- a consequence of the falling transition in social mood.
Vikram Pandit, chief executive of Citigroup (C), took time out of his busy schedule running the nation's moneyest-losing bank to stop by Capitol Hill yesterday and thank US taxpayers for their generosity, however unwitting it might have been, in bailing out the bank he runs.
Pandit told the Congressional Oversight Panel, which monitors the bailout program, that the bank owes a "large debt of gratitude to the American taxpayers." Then he blamed short-sellers for everything.
Citigroup lost $1.6 billion last year, and $27.7 billion the year before. But who's counting? Apparently, no one; otherwise, how else could you explain the fact that the bank's compensation committee, lauding Mr. Pandit's performance in a letter, claimed it "merited an incentive award." To his credit -- heh, credit, inside joke -- Mr. Pandit declined the compensation bonus because of his pledge in February to take $1 a year until the bank becomes profitable.
But let's get back to blaming the short sellers. “There were a number of instances post the Lehman collapse ... where the markets were not really functioning in a rational way -- they were frozen,” Mr Pandit said. “There are ways that fear overtakes it and that’s the tool that short sellers need to make money.”
Unlike Mr. Pandit, we don't need to speculate on the fundamental or technical causes of Citigroup's shoddy stock performance and blame everything on some nebulous cabal of "short sellers." We can look at the data.
CLICK TO ENLARGE
Since taking over as CEO on December 11, 2007, Citigroup stock is down 88%, compared to -22% for the S&P 500 and -47% for the KBW Bank Index, which no doubt has lagged the S&P 500 so severely because of Citigroup -- it's second-largest weighting in the index behind Bank of America (BAC), which incidentally, is down 60% over the same period. Damn, short sellers. As well, over the course of the 27 months Pandit's been at the helm, the stock price has only closed up month-over-month on 12 occasions, less than half the time.
It seems the only thing short sellers need to make money is for Mr. Pandit to be in charge of Citigroup.
2. The Looming Crash?
A lot of smart people are worried about a coming crash in the stock market. Some have even pinpointed a date around the March 15 as showing an increased likelihood of there being a market crash. Josh Lipton wrote about this yesterday, but I wanted to follow up with where we are in DeMark terms.
On a quarterly basis, the TDST Down level of importance is 960.84. The break from the fourth quarter of 2008 remains disqualified.
Monthly, we're on the second bar of the 1-4-bar window following the TD Sell Setup in January, which recorded below TDST Up resistance. That gives us a window of about 11 more weeks for the sell setup to manifest.
Weekly, we're on bar 12 of a potential 13 sell signal. We "need" a high above bar 8 sometime within the window provided by the monthly sell setup to record a high above the close of bar 8 (1144.98) for the sell signal to record.
Finally, on a daily basis, the TDST Up level resistance is 1050.23 and we're currently on bar 5 of a potential sell setup that records next Thursday if the close is above today's close.
Longer-term, I don't care about a crash. It's only for traders speculating to be concerned with. What I see is that over the past decade, moves below 800 have been very short. Even if we drop to 400 -- and there's a non-trivial possibility we could do that -- then those with time frames similar to mine, exceeding 20 years, are better off hoping for a crash than worrying about one.
3. Popular Science Opens Up Entire 137-Year Archives
Popular Science magazine, the American periodical founded in 1872, announced it has partnered with Google (GOOG) to open its entire 137-year archive for free search. There are plans to add more advanced search functionality in the future. Below is a 1985 issue on the search for extraterrestrial life.
Students of socionomics can find a wealth of information in these back issues simply by looking at the period advertisements in each issue.
ADVERTISEMENT HERE
4. Speaking of Popular Science...
Digging through the Popular Science archives, I was reminded of something I stumbled across a couple of years ago via Wired magazine: Peter Thiel Explains How to Invest in the Singularity.
In that 2007 piece, Bryan Gardiner outlined the views of Peter Thiel, co-founder of PayPal, which was later acquired by eBay (EBAY), and president of Clarium Capital Management, on "the coming singularity." That's so 2007! Here we are three years later and few are talking about the concept of the coming singularity now. What happened? A couple of things, each related to social mood as the driving force behind the worldview that the coming "singularity" would drastically shift our lives.
First off, singularity refers to the hypothesis that we're entering a new era in which the very nature of what it means to be human will change, all due to the challenges presented by a rapid escalation in new technology. The futurist Ray Kurzweil is perhaps most closely associated with this view, and indeed Kurzweil has a movie about singularity, The Singularity Is Near slated for release this year. So it's not as if the notion of singularity has disappeared from the radar of futurists and scientists, just that it's receded from public consciousness -- a consequence of the falling transition in social mood.
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