What worries me is that CitiCorp has 23% of its assets lent out in Asia.
According to Michael Murphy in his Overpriced Stock Report 12/97 CityCorp is the world's great short right now. Pity those Japanese CEO's who trust an American bank. Hey, you can't know everything unless you read obscure overpriced newsletters.
In his newsletter Murphy opines, "CitiCorp's mission seems to be world leadership in investing in areas that get into serious trouble....people who go broke but are judged "too big to fail" by Alan Greenspan don't have to close their doors
Instead, Mr. Greenspan slashed short-term interest rates to the point that some Social Security retirees were eating cat food, then let the banks put those cheap desposits in long-term Treasury bonds and use the spread to rebuild their capital.
If you think something is wrong with starving old people to save the jobs and equity of reckless bankers you don't understand modern American politics. It worked like a charm, and Mr. Greenspan was showered with praise for saving teh US banking system.. Unfortunately, by short-circuiting the capitalist system, the question for us (Murphy) was saved it for what?
Welcome to the next time around.
It's called Asia. CitiCorp has 23% of its assets in Asia, more than any other bank because the interest wrates were highest there, and, if things blew up (again), the Amrican taxpayer woujld bait it out again because it is... "too big to fail".
Short over $125 for a target of $86 in two months."
NB. I should buy a scanner.
Thomas thanks for the S&P information. Look at all those damaged bonds and this is just the begining! Just think Mike Milken...1978.
Mohan on another post when I am up to it I will tell you a true story of how badly people misjudge Asian financial markets and government invest banks.
Hey, and just another thought. For decades the World Bank has been "rolling over" Pakistan's debt... so it can service the interest on the original debt. I guess we all knew that I'd just forgotten about it.
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