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Summarizing This Afternoon's Financial Rumors
Charlie Gasparino over at Fox Business News reports a rumor that the government may be looking to dispose of its 27% Citi stake at some point over the next 3 months. Logistics aside, presumably somehow this means that even more bankrupt companies like AIG, FNM and FRE are probably next in line for offloading the taxpayer stake into the hands of hapless hedge/sovereigns funds. We hope it is not the same hedge funds that have recently received subpoenas and C&D orders from ever shorting the euro (i.e., going long the dollar).As a reference point the gov't owns 27.01% of Citi which has a hilarious market cap of $108 billion, and owns 80.66% of AIG with its $23.5 billion capitalization (and $107 billion in debt). This explains why the government is now actively pulling the borrow: gotta sell at the highest possible price.
The U.S. government, looking to unwind its investment in the banking system following the near-collapse of the financial
system in 2008, is discussing plans to sell its massive stake in Citigroup,
possibly as early as this spring, FOX Business has learned.
Previously, federal officials, including Herbert Allison, who heads the Troubled Asset Relief Program, have said that they
plan to unload the government’s 27% stake in Citi over the next year. But FBN has learned that in private meetings with Wall
Street investment bankers, the federal government is discussing the possibility of doing it sometime over the next three months.
Meanwhile, Doug Kass reports that a rumor of "new stringent short-selling rules is causing a squeeze in heavily shorted names this afternoon."
Last but not least, here is the rumor as reported by Seeking Alpha.
So yes, it appears we are back to the joyful days of late spring 2009 when the rumorsphere drove crap financials into the troposphere, even as nobody knows anything, and rumors are generated simply to explain massive short squeezes.
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The stock market is like a H.S. cafeteria, and no better.
Why unload now? If they believed in a longer rally, wouldn't they hold on for the ride? Personally, I think that Canter-Fitzgerald's Hollywood Future's index should pump some cash into the market. The big thing I am waiting for is China unpegging from the doelarr. I have no idea what will happen then, but now I am thinking it could make some waves. The US is going to need a bigger boat I presume.
gee, let's make short selling tougher in an overvalued market propped up by phony Fed money and one of the most massive propaganda campaigns in modern history because surely the Fed understands that it can completely control the equity and bond markets forever. bernanke really IS a dumphuck.
I suppose this explains the parabolic run up in financials the last two weeks!!
The withdrawal of government life support means these rotting carcasses will be turned over to the vultures at rock bottom Dollar Store prices and dismembered. Taxpayers will eat the losses and the bones.
Spring is the season for renewal of more back alley rumors and cons to demonstrate success that is really a mirage.........in time for the mid term elections. Right on schedule.
That definitely explains the
"Citigroup shares: No longer toxic?"
headline over at CNN... Feel sorry for the sheep who actually fall for this stuff.
But... but... Citigroup is selling for only 0.9 times book. It's the bargain of a lifetime!
Well, except that "book" value is widely open to interpretation, whether on- or off- balance sheet.
is that using barney frank or charlie rangel accounting standards
That's using FASB (as greatly influenced by Frangel & Rank).
and the off balance sheet sludge does not have to be weighted for capital thanks to sheila bair, administrative assistant to the PPT. heckuva job circumventing the FASB 166/167 rules.
Smells Fargo 09/30/09
Total Qualifying Special Purpose Entities: $1,796,209,000,000
Citigroup 06/30/09
Total Qualifying Special Purpose Entities: $828,300,000,000
J.P. Morgan 06/30/09
Total Qualifying Special Purpose Entities: $574,000,000,000
Dat's a lotta meatballs
http://www.youtube.com/watch?v=ErgdUhZteqw
I can't believe I ate that whole thing.
http://www.youtube.com/watch?v=sfzZpQXZIUY
http://www.youtube.com/watch?v=yUNiYN64H9k&feature=related
you guzs are weapons of mass distraction. i have to try so hard to read and comprehend the content of posts and comments and you keep throwin in the comics†
I fell for it when Cramer said it was a buy buy buy in December, please feel sorry for me, I'm only up 24% since then.
sound good we need 140 dollar oil and 7 dollar copper, that will be very stimulative, right right right
Chile needs the money. Buy copper.
No worries the pension funds will load up on the garbage giving them the final push to cross their target thresholds
No worries the pension funds will load up on the garbage giving them the final push to cross their target thresholds
This is telling you to buy DXD....NOW!
Pig, meet lipstick.
Lipstick, this is pig.
the pension funds will be funded by the government at the end
which means the US tax payers and all other countries will have to compensate the lost.
It is just another method to brush the waste into the garbage can and assume the room is clean.
The stock market is bloated by artificial demand - this can't be sustained but what's a FED/treasury secretary to do? Keep it going higher - 12000?, 13000?, 14000? then what? Blame it on the bond vigalantes? - sounds plausible.
Are you talking SPX or SPY? Just curious.
Is it true that if you quit paying your mortgage during a transition like this your paperwork falls through the cracks? It keeps getting passed on to the next holder and you're not late if you missed payments to the last holder!
Firstly, these are completely unsaleable pieces in the private markets. Everybody knows they are shit, the only reason they trade is the same reason people bet on dogs, horses, cockfights etc.
Secondly, I love how "we" taxpayers only own 27% of that POS Citi, when we have hundreds of billions in guarantees on the pig. We should at least own 100% of the POS.
It is a disgrace that these casino chips still trade, they should've been delisted as soon as the govt stepped in.
Please remember that the government stepped in not to save the shareholders but to save the bond holders.
and the House of Saud in regards C.
I am sure TD gotta love the last hour. You build a pyramid over many days,only to see it unravel in one damn hour?!!
you wouldn't destroy confidence in the market like this unless you knew it wouldn't matter.
Capitalism, if it ever really existed, has now surely collapsed into some sort of weird central government controlled model.
I propose we are not much different from the Chinese after all.
Well, if they end up curtailing short-selling more, they'll be swimming in their own tears in the next down cycle. They're just going to be that many less bids to slow the bitch down when she finally falls off the 30th floor balcony.
yep more money for the pirates eh Blackbeard ? Load up on puts they will be priceless when TSHTF
YARRRRRRGGGHHH!!! to long dated puts.
Priceless??? You mean like perfectly flawless diamonds??? PUTS lose time value so quickly that even long dated guys are not far out enough. 2012's ya think?? How 'bout those that expire 12/12/12??
Normal market principals would suggest just that but it is pretty clear these are not normal market condition, there will always be a bid when necessary.
you don't destroy confidence in the market like this without first having concluded that it doesn't matter.
I would actually think people on this site might think the shorting ban is a good thing. For when the dam breaks in the future, there will be a flood of supply, and no short covering to stop it.
We dont want your stinking paper dollars anymore.
We want GOLD.
Thats what we learned.
Thats what has changed.
I thought about this last year sometime...why prop the equities and certainly prop up those stocks that the Treserve is holding?
To inflate the price of Treserve held equities up to a point where the Treserve can sell their holdings to idiots thinking that they are seeing a rebound. Treserve gets it's money back out then stops propping the equity market and chases funds into Treasuries.
Maybe i'm just paranoid and untrusting but I'm not buying into it's little rally.
hmmmm
SEC says no truth to rumor that it is considering short sale curbs on companies in which US government has stake - Reuters
Jesse had this on his site...
It has also been reported by Adam Johnson on Bloomberg television that J.P. Morgan, a major broker dealer, stopped lending shares in AIG and Citi today "on rumours that the US government might ban short selling in stocks in which it has a financial interest." This squeezed the shorts and helped give an artificial boost to financial stocks over all. The company has since stopped this self-imposed ban on loaning shares and stocks are falling off their highs.
the rumors
pavlovian dog speak ring drool gruel bowl
I think one of two possibilities will come from what the government is about to do.
1) The Rothschilds of the U.S. will pick up the shares at bottom dollar prices and news will erupt from mainstream media that the shares are a great investment. Thus following suit the banks will take everyone's retirement funds and switch them over to also buy in, but only after the price of them is higher. Shortly after they will be dumped faster than people can even realize and the fleecing of the middle class retirement fund will continue.
2) The U.S. is dropping the shares in anticipation of the next leg of the economic crisis. I am not sure what they have in their playbook but I can only imagine that if they are dropping support then we are in for some bad times indeed. Because as it stands the economy has not been getting any better and in fact has gotten significantly worse within the past 2 months.
The government is a stockholder in C, who bilks customers 29.99 APR on their credit cards, with money C gets for free from the government, leaving people with nothing left to spend. Perhaps getting into payday loan stores, our shrewd treasury.
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