Treasury Selling Citigroup

The Treasury has announce that it has authorized Morgan Stanley to sell 1.5 billion shares of Citigroup or 20% of their stake. Is it a coincidence that financials, especially Citigroup were weak Friday? Do you think the SEC will investigate who at Treasury leaked the info? Rhetorical question.

11 comments:

PJ said...

You can't let yourself get shaken out of bank shorts too easily. C particularly, the most overvalued bank.

As for leaks, I'm amazed they've kept it as quiet as they have. Morgan Stanley has been shopping C shares and many buy-side firms must know the scuttlebutt.

Anonymous said...

PJ,
Are you still short GS? I posted last Monday, that I would consider buying it at $145. You think it will go lower than that?

PJ said...

Anon - At this time I'm not short GS directly but I have an ETF position which is short the banks and includes GS - SEF.

My favorite bank shorts are C and WFC.

GS is impossible to trade in my view because it's a political creature now and everything rides on how the government treats them. All their profits come from the government; and if the bull rally continues and extensive manipulation of the economy and markets continues they'll continue to make big profits. On the other hand, financial reform, if the populists win, could kill them.

I stay away from single name stocks when insiders have too many information advantages.

Anonymous said...

Don't be touching that Goldman Sachs dawgies till it hits the support at 150/149. And short it if it breaks that. I doubt it will happen but never know.

Anonymous said...

Better play right now is long than short. I noticed market stocks don't really trade off technicals in a textbook manner. Probably too much smart money in them trying to front patterns.

PJ said...

Yeah, if I were predicting the next 24 hours, I'd predict GS up. Market always rallies when the Fed makes a statement or Obama makes a speech. Fed meeting this week should produce at least a brief spike.

In the long run, meaning by September, I expect a resumption of the economic downturn to drive all the financials well down.

Anonymous said...

I try not to form an opinion on the future of the market because it taints my view which can be detrimental if you're wrong. But anyways, I think the market is about top in the very near future, create a medium term top, go down and then bounce into the fall.

The problem with the economic downturn trade is that it wouldn't exist had we not crashed. 08-09 suddenly spawned a new generation of pessimists. There's so many nowadays that smart money is probably using them as short cover fuel.

Anonymous said...

I'm Confused.
This is what you posted last Tuesday. Unless your a different PJ.
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PJ said...

Well, a Goldman short represents about 2% of my assets. We'll see. My time frames are much longer than yours, so we could both be right.

April 20, 2010 10:52 AM
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Anonymous said...

GS right now looks the same way that SPX looked in late January to middle of February.

PJ said...

Anon - Think of it this way. XLF is 4.5% GS. I'm essentially 50% allocated to short XLF. Translation = 2.2% short GS.

Anonymous said...

Pj- thank you for the clarity. My misunderstanding.