Am I The Crazy One

If I were holding a position where I knew that the largest holder was about to sell over $30 billion worth of my stock I would get out of dodge. I would not have a second thought about it. Yet Citigroup is trading up on the news that the government is selling. Am I the crazy one?


PJ said...

Heh. I think you know the answer to that one.

In a manipulated market, bad news is good news. Bad news can't be allowed to create negative momentum. The sheep have to be led to believe that if it goes up even on bad news, it will go up always.

I think the government is waiting much too long to sell and will not be happy with the price they receive. But I guess they want to get the various TARP issuances and new rounds of bank capital raises out of the way first. Hoenig said the other day that the biggest banks could need up to $210 more capital to meet standards in the Volcker plan. That suggests the regulators are pushing the banks to raise capital.

Anonymous said...

The dow is now up over 1,000 straight pts from Feb 8th!!

Very impressive.

Like I've been saying, the last few post, the bulls will push above 11,000. Mainly for psych reasons.

I see a tradable pullback after that. Good luck

Chaos! said...

Looks like the market had priced in that the government would dump the stock. Given that there will be a process "over time" that's triggered a relief rally (and another leg up) in financials, which is taking the market up with it.
I might be crazy but I'm staying short. If financials rally tomorrow I'll eat my humble pie!

Tsachy Mishal said...

Citigroup will sink once the shares are issued. I dont think the market is pricing in anything.

PJ said...

just noticed - that was supposed to be "$210 bn" up above.

I don't think the market is pricing in anything either, other than dreams and fairy dust.