Another day, another bailout: Citigroup

“Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup’s balance sheet. As a fee for this arrangement, Citigroup will issue preferred shares to the Treasury and FDIC. In addition and if necessary, the Federal Reserve stands ready to backstop residual risk in the asset pool through a non-recourse loan.

In addition, Treasury will invest $20 billion in Citigroup from the Troubled Asset Relief Program in exchange for [$27 billion of] preferred stock with an 8% dividend to the Treasury. Citigroup will comply with enhanced executive compensation restrictions and implement the FDIC’s mortgage modification program”

Citigroup pre-market futures indicate a sharp recovery from Friday’s lows. The stock is up 60% to $6. Dow and S&P futures are up as well.

Filed under: Economy, Financial Markets, Finance, Financial Bailouts | | No Comments »

Reuters: Over 100 U.S. “blue chips” now selling for under $10 a share

This is pretty spooky

Blue chips, including Citigroup (NYSE:C - News; $6.40), Alcoa (NYSE:AA - News; $8.16), Xerox (NYSE:XRX - News; $5.58), Motorola (NYSE:MOT - News; $3.44), Starbucks (NasdaqGS:SBUX - News; $7.97) and Yahoo (NasdaqGS:YHOO - News; $9.14), not to mention beleaguered automakers Ford Motor (NYSE:F - News; $1.26) and General Motors (NYSE:GM - News; $2.79).

According to S&P data, 101 is almost double the 59 companies with share prices below $10 in October 2001 when the dotcom meltdown was in full swing and almost triple the 35 sub-$10 stocks in October 1987

http://biz.yahoo.com/rb/081119/business_us_sp_10bucks.html?.v=1

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Markets retest of Oct lows succeeded

We predicted this last month. We are seeing a W in the Candle charts. If this retest is successful today, we will aim higher. Otherwise lookout below.

Here is an excerpt from BigPicture blog.

Markets have come increasingly close to their October 10th lows. Contrary to what you may have read or heard on TV, this is precisely as it should be. Why? Major lows get retested. That is a basic tenet of market behavior, and crowd psychology. (This has been verified by a variety of studies by different technicians, economists and traders).

There are a variety of different ways to define the terms, yielding some variations, but the basic outline remains the same: All major sell offs hit a point where markets become so deeply oversold, that a rally ensues. Depending upon how deep the prior sell off is, this rally typically lasts anywhere from 3 to 6 weeks. Our work at FusionIQ shows that these snap-backs typically go for about 4 weeks and average ~24%.

http://www.ritholtz.com/blog/2008/11/retest-of-the-october-lows/

The number of newly laid-off individuals seeking unemployment benefits has jumped to a level not seen since just after the Sept. 11, 2001, terrorist attacks, as companies cut more jobs in the face of a slowing economy.

http://biz.yahoo.com/ap/081113/jobless_claims.html

Filed under: Economy, Trading Strategy, Financial Press, Finance | | 1 Comment »

Are Stocks cheap?

Why Stocks Are Dirt Cheap?

Jeremy Siegel writes this on Yahoo column.

Aggregate earnings over the past year are greatly depressed by huge write-offs not only in the financial sector but in other firms. For example, Ford, GM, and Sprint, whose aggregate market value is less than 0.2% of the S&P 500 Index, lowered the S&P’s reported earnings by about

Note: We made a similar case 2 weeks ago when the market bottomed out at 8000.

VIX drops below 50 for first time since October volatility.

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Tracking U.S Presidential Election 2008 Winner Obama

Nov 4th 11:13 EST - Futures markets up slightly

Nov 4th 11:00 EST - Obama projected winner
Nov 4th 10:37 EST -  Electoral Votes count: 207 Obama vs 135 McCain
Nov 4th 8:30 AM EST - Markets are set to rally ahead of Election day. My prediction if Obama wins tomorrow, Dow will see 10,000 by Friday still stands.

Filed under: Economy, GeoPolitics, U.S Politics | | No Comments »

It’s Election time

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Currency market says much about Bush’s presidency

Currency market says a lot of about Bush’s Presidency

Filed under: Economy, Financial Markets, Forex | | No Comments »