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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Arran Yuan who wrote (25767)	11/27/2007 9:23:04 PM
From: elmatador	Read Replies (1) \| Respond to of 217694

THE ERA OF UNTHINKABLES HAS BEGUN, and who knows where it ends. Anyone who would have suggested a year ago that Citigroup, one of the world's largest financial institutions, would need a capital infusion would have been an alarmist. And yet, the Abu Dhabi government is pumping $7.5 billion in the largest U.S. banking company by assets, following massive mortgage-related losses and the ouster of its chief executive. The investment makes the Abu Dhabi Investment Authority one of Citigroup's largest shareholders. The stake will not exceed 4.9%, according to published reports, but it will exceed that of Saudi Prince Alwaleed bin Talal, one of Citigroup's top shareholders. News of the investment generated lots of excitement, but it has not translated into a higher stock price. Investors still seem inclined to conclude that the risks outweigh the rewards -- at least during the short-term. In the options market, the most notable trades made after the investment news was reported occur in January 25, 27.50 and 30 puts. Big investors were active as block trades representing 80,000 contracts were executed, suggesting hedging positions. "The only thing that is certain about Citigroup is that it is trading well below its 52-week high," said. Michael Schwartz, Oppenheimer & Co.'s chief options strategist. Rather than trying to trade the Abu Dhabi news, Schwartz said investors should consider "doubling up" on Citigroup to realize a tax loss for 2007, while also preparing for a potential rebound to occur in the next 13 months. Doubling up refers to identifying a stock that is down for the year, but that an investor believes still has merit. The investor buys a similar amount of shares, and then after 31 days sells the original shares to realize a tax loss. The sale has to occur after 31 days to avoid triggering the Internal Revenue Services' "wash sale rule" that voids any tax losses if the time frame is violated. Schwartz said Citigroup investors could buy January 30 calls that expire in 2009. The calls were recently trading at $6.80, which means the stock has to advance to $36.80 for the trade to breakeven. At $43.60, Schwartz said an investor would double his money. Indeed, Abu Dhabi is taking a long view on Citigroup, although the government fund is getting paid handsomely in the mean time. The investment, which is expected to close in several days, consists of convertible securities with a junk-bond-like yield of 11% convertible into Citi common at prices between $31.83 and $37.24 between March 2010 and September 2011. "Rather than trying to trade a bounce, why not double up and realize a tax loss?" Schwartz said. "When it comes to Citigroup, let time work for you, not against you."

To: Arran Yuan who wrote (25767)	11/28/2007 6:17:01 AM
From: TobagoJack	Respond to of 217694

the concern ... skip that the worry ... no, that isn't right either my guess is that - financial economy much larger than genuine productive economy - the largeness is due to debt, in historically speaking large tranches - the debt mountain is cratering - all asset values will be taken down - even as all daily necessities will rise in price, due to baked-in fiat money inflation seeping into every nook - the officialdom will do only what they can, pile on fiat money in biblical proportions to try to cover the cratering mountain - thus make everything worse and all worse off - winner does not take all - winner loses the least