IMO Citi is the key not Fannie or Fredie which the goverment will lend cash they will not take these over. Mer is going to get hit Citi is the true unknown. Citi will come in with around 5 billion in write downs not the crap you have heard of 8 or 9 billion. In addition the loss will be less then the average of .65 per share should be in the range of .37-.39 this however bad will cause city to rally after earnings report and should close at around 17.50 after earnings on Friday. I am not a pumper but am long 5,00 shares of city at 19.00 comments please.
I bought a 1000 shares of citi a 19.18 a share. I also help Oct 22.50 puts, so I was protected. I decided to sell the shares last week, as I waited for the relief rally. When the rally couldn't hold I decided that we were in for a much bigger decline.
Citi will write off as much as they make this quarter. Don't expect the kitchen sink write off. The strategy that troubled banks are using are to write off what they make, so it doesn't look too bad. Unfortunately, its going to be many quarters if not years before Citi is done.Citi has a lot of problems in my opinion. Credit card delinquencies, construction loans, hedge fund losses, CDO losses, SIV losses, and Student loan losses.
This stock will probably be in single digits by October. They will have plety of company though.
unfortunately for you, Citi will have multiple losses in the coming quarters. This quarter will also be bad and worse than the numbers you are proposing. Anyway, the trend is down and losses will only increase in the coming several quarters.
Well, Citi is a proxy for the financials. You can check this by comparing a Citi graph with an XLF graph.
And the financials are pretty much swinging up and down with the DJIA, which you can also compare.
So aside from the individual results from individual enterprises, the overall market bias is pushing down on the finanicals. You can't fight the general market. And the general market is being held down by the sub-prime mortgage mess. Therefore, there is a way to go yet with respect to the financials. In an up market 3 out of 5 stocks can do quite well. When the overall market is down, 4 out of 5 stocks suffer with it.
Once again I am still saying Citi is the key with earnings on Friday. Write down should be around 4-5 billion not the 8-9 you are hearing. Loss per share will be around .37-.39 not the much higher people are saying. This will put a short squeeze on the stock with options expiring the same day. Remember earnings are out before the open. Citi should be forced upward to around 17.50 by Friday afternoon. I am long 5,000 shares and not a pumper and I did get in at 19.00 If I am wrong I still will ride this out it will come back. Shorts want you to sell only helps them don't panic.
You've got guts; I'll give you that. I think you're really sailing against the wind on this one.
This whole sector SUCKS! All of these banks, including C, have huge downside risks without a lot of upside potential anywhere in the foreseeable future.
Let's say you're right about the earnings- I mean losses- you might get the rally you're predicting. If the macro winds shift short term for a while, you might even get a run back into the 20s. However, if you're wrong or if the macro winds turn nasty, you could lose a hell of a lot of money.
If you're actually good enough to crunch thropugh numbers and forecast companies' earnings, it seems to me like you should be in tech, alt. energy, or pharma. In financials, it's like you're trying to run a marathon in ankle weights.
If you really like banks, you ought to get into the preferreds. They're trading at such a discount to par right now that they have almost as much upside potential as the commons do, with way less downside risk- and the yields are much higher.