The FoH Stock Market Game

[prescient63]

I can't decide if the fed is cutting rates. Think i might sell off on monday and go defensive for a few days. A rate cut would be bad for me.

[rinthea]

according to the fed funds futures at cbot, the market is going on an 84% chance (jumped 20 odd % after fridays job report) of a half point cut.

I see little risk of the risk of this increasing before the meeting, and you could always bail after the announcement, if your quick where it usually goes the wrong way first, (like it did the last time after they held)... good old sell on news trick...meetings not until jan 30 anyway

[Gahid]

Early bird gets the worm. For my money the rate cut is tomorrow.

This, because our economy is teetering on the edge of collapse. There is a lot of faith in the marketplace - I believe because of the coming election. If the feds do not cut the rates tomorrow we will see a drastic fall by next Monday. As business owners count their inventories a subliminal depression will emerge. Ours was not a busy Holiday, and we feel it.

[rinthea]

wats a subliminal depression? sounds like propoganda talk to me

if the fed cut rates this week, i wont post here again & pls ban me from FoH... seriously

[Gahid]

I don't speak Businese. I meant to say there is a latent depression.

also, speaking english better would help.

[Kindnugs]

sbux! buy it!

[prescient63]

Heh the people with the starting amount now occupy 12-32. Don't think rinthea catchable at this point though =/

[Gahid]

Damn your Buffalo Wild Wings!

I drove past one of their storefronts a week ago - I can't believe I invested so heavily in such a tacky dump.

[Yutnopash]

Screw it, I'm just going to ride my 1k+ shares of Exxon Mobil until this shit is over and done with. Valero lost me over 4k...

[prescient63]

Shorting Citigroup looks like a pretty safe bet today.

Citigroup Posts Record Loss on $18 Billion Writedown (Update2)

By Bradley Keoun

Jan. 15 (Bloomberg) -- Citigroup Inc. posted the biggest loss in the U.S. bank's 196-year history as surging defaults on home loans forced it to write down the value of subprime-mortgage investments by $18 billion.

The fourth-quarter net loss of $9.83 billion, or $1.99 a share, compared with a profit of $5.1 billion, or $1.03, a year earlier, the largest U.S. bank said today in a statement. New York-based Citigroup also reduced its dividend by 41 percent, cut 4,200 jobs and obtained $14.5 billion from outside investors to shore up depleted capital.

``Our financial results are clearly unacceptable,'' Chief Executive Officer Vikram Pandit, who was installed in December after Charles ``Chuck'' Prince stepped down amid mounting subprime losses, said in the statement. ``We are taking actions to enhance our risk-management processes and to improve expense productivity.''

Citigroup racked up record losses as it misjudged the depth of the mortgage crisis. The writedown for subprime home loans and related securities was almost double what the company expected as recently as November. The bank also said it set aside $4.1 billion more in the fourth quarter of 2007 to cover loan losses.

The markdown on subprime securities is the biggest so far, exceeding the $14 billion reported by Zurich-based UBS AG, Europe's biggest bank.

`Bad News to Come'

``Things are still bad out there for financials, and there's more bad news to come,'' said Jon Fisher, who helps oversee $22 billion at Minneapolis-based Fifth Third Asset Management. ``The balance sheet is a mess, they've got to raise capital, and the charges keep going up every day.''

The net loss exceeded analysts' estimates of 97 cents a share, according to a survey by Bloomberg. Citigroup has slumped 47 percent in New York Stock Exchange composite trading during the past year. The shares fell to $28.48 in early trading from $29.06 at the close yesterday.

Standard & Poor's lowered its long-term rating on Citigroup to AA- from AA after the earnings announcement, reflecting the ``severe losses'' and the likelihood that the bank's 2008 performance ``could be rocky.''

Bank of America Corp., which may report an 80 percent drop in fourth-quarter net income next week, fell 27 percent in the past 12 months and JPMorgan Chase & Co., which may post a 31 percent decline in earnings tomorrow, lost 14 percent of its market value.

Dividend Reduced

Citigroup, founded in 1812 as the City Bank of New York, cut the quarterly dividend to 32 cents a share from 54 cents. The reduction, the first since the merger of Citicorp and Travelers Group Inc. in 1998, will help save the company about $4.4 billion annually. The company said as recently as November that it had no plans to lower the payout to shareholders.

Citigroup also had to turn to outside investors for fresh capital for the second time in two months, bringing to $22 billion the total amount raised. The bank said it raised $6.88 billion by selling convertible preferred shares to an investment fund controlled by the government of Singapore. Similar shares were sold to Capital Research Global Investors, Capital World Investors, the Kuwait Investment Authority, the New Jersey Division of Investment, Saudi Prince Alwaleed bin Talal and former Citigroup CEO Sanford I. Weill.

In November, the bank got a $7.5 billion injection from the ruling family of the Middle Eastern emirate Abu Dhabi. Alwaleed, the 52-year-old billionaire, already owns 4 percent of the company. He has been Citigroup's biggest individual shareholder since the early 1990s, when soured investments in commercial real estate left corporate predecessor Citicorp short of funds.

Weill's Strategy

Weill, 74, spent 17 years building Citigroup through a series of bank, brokerage and insurance-company mergers before retiring as CEO in 2003 and naming Chuck Prince his successor.

Without a capital infusion, Citigroup's so-called Tier 1 capital ratio, which regulators monitor to assess a bank's ability to withstand loan losses, would fall below the company's target to about 7 percent, Goldman Sachs Group Inc. analyst William Tanona estimated last month.

The decision to cut about 1.1 percent of the company's 375,000 employees as of the end of 2007 follows Pandit's pledge in December to conduct a ``front-to-back'' expense review of the company. The workforce had swelled from 327,000 at the end of 2006, even as Prince and former Chief Operating Officer Robert Druskin eliminated about 17,000 jobs.

Investment Banking

The latest job cuts, scheduled to take place this month, are mostly in the company's trading and investment-banking division, which posted a fourth-quarter loss of $11 billion after earning $1.75 billion a year earlier.

More job cuts are planned this year, according to two people familiar with the situation. Pandit, 51, aims to complete his cost review by April and may announce then whether to sell or spin off businesses within Citigroup, which spans 100 countries. Some analysts, including Deutsche Bank AG's Mike Mayo, have called for a breakup, saying the company is too unwieldy to manage.

Citigroup's overall revenue in the fourth quarter fell 70 percent from a year earlier to $7.22 billion, while operating expenses climbed 18 percent to $16.5 billion. The company's consumer-banking unit had net income of $756 million, down 71 percent from the prior year, and earnings at the global wealth management division, which includes the Smith Barney brokerage, rose 27 percent to $523 million.

For the full year, Citigroup had a $3.62 billion profit, down 83 percent from 2006.

Great Depression

The fourth quarter may be the worst earnings period for the financial industry since the Great Depression. Analysts estimate Merrill Lynch & Co., the biggest U.S. brokerage, will report a record loss of more than $3 billion after writing down the value of mortgage-related securities, and Bank of America, the second- largest U.S. bank by assets after Citigroup, may report its biggest profit decline since its formation in 1998 from the merger of BankAmerica and NationsBank.

Merrill, the biggest U.S. brokerage, said earlier today it raised $6.6 billion by selling preferred shares to a group including the Kuwaiti Investment Authority and Japan's Mizuho Financial Group Inc.

Two days after becoming CEO on Dec. 11, Pandit bailed out seven so-called structured investment vehicles, shifting $49 billion of assets onto Citigroup's balance sheet and obliging the company to increase its capital cushion. The decision increased the chances that Pandit would have to cut the dividend, according to CIBC World Markets analyst Meredith Whitney. The payouts to shareholders cost Citigroup about $2.7 billion a quarter.

To contact the reporter on this story: Bradley Keoun in New York at

[rinthea]

I dont know, its already down almost 3% from fridays close. Buy the rumour, sell the news type of deal (but in this case the opposite). Not that I'm brave enough to buy it here.
I'm kinda bullish into the FED meeting on the 30th. Where I think people are going to realize taht .5% isnt enough and Bernake wont be able to cut further resulting in confidence and sentiment being hit pretty hard causing a fairly disastrous month or two. If so, getting that right would be the trade of the year & getting set at the bottom could be a time to put some stuff away and lock the key.

[prescient63]

Originally Posted by rinthea

I dont know, its already down almost 3% from fridays close. Buy the rumour, sell the news type of deal (but in this case the opposite). Not that I'm brave enough to buy it here.
I'm kinda bullish into the FED meeting on the 30th. Where I think people are going to realize taht .5% isnt enough and Bernake wont be able to cut further resulting in confidence and sentiment being hit pretty hard causing a fairly disastrous month or two. If so, getting that right would be the trade of the year & getting set at the bottom could be a time to put some stuff away and lock the key.

It's down 3.5% so far.

[rinthea]

With kinda bullish, I mean the entire market. Still bearish financials compared other sectors. C down 5.5% now, couldnt resist putting in a buy order, below the swing low hoping it tickles some stops and gets me filled.

[Gahid]

I clicked buy instead of sell. Doubled my stake in BWLD. Then, it dropped another 90c.

Fuck this.

[prescient63]

LoL I'm annoyed as well.. my trades i placed at 10am yesterday haven't moved yet