US Bank Stocks

Are going to go up. A lot. The federal government is going to buy their toxic assets and they will wimp out on the negotiations and pay too much. It will still be a hit to the banks but they will recover quickly. That’s my prediction. I like this game because anybody can play and anybody can be right/wrong and who was right/wrong will of course be proven in due course.

I don’t know which bank will be the best bet and for this I seek the generous council of forumosa’s investment community.

Thank you.

[quote]In developing countries, like the one I come from, the importance of [financial] paper is pretty obvious. Most of our people are poor and live in the anarchy of the shadow economy, where their assets and contracts are covered by paper that is endemically toxic: not recorded, not standardized, difficult to identify, hard to locate and with a real value so opaque that ordinary people cannot build trust in each other or be trusted in global markets. In the shadow economy of the developing world, credit paralysis is a chronic condition. So when I look at the recession that has started in the West - triggered by toxic paper - I feel right at home.

Hernando De Soto, Newsweek[/quote]

I’ve had a hard on for Citibank since their stock has plunged. is it worth buying? At this point I figure why the hell not throw $2000 on it?

Am I stupid, is this a good idea?

Please advise.

[quote=“Deuce Dropper”]I’ve had a hard on for Citibank since their stock has plunged. is it worth buying? At this point I figure why the hell not throw $2000 on it?

Am I stupid, is this a good idea?

Please advise.[/quote]

It’s only stupid if you can’t afford the loss. Its pretty much gambling at this time the way I see it.

I’m still reckoning on these Zimbabwe style inflation tactics to backfire and come kick themselves right up the arse. Unfortunately although I have tried my best to position myself in gold to hopefully avoid this problem, I don’t think the general public will understand the potential for total economic collapse in places like the U.K., U.S.A., E.U. etc.

[quote=“sulavaca”][quote=“Deuce Dropper”]I’ve had a hard on for Citibank since their stock has plunged. is it worth buying? At this point I figure why the hell not throw $2000 on it?

Am I stupid, is this a good idea?

Please advise.[/quote]

It’s only stupid if you can’t afford the loss. Its pretty much gambling at this time the way I see it.

I’m still reckoning on these Zimbabwe style inflation tactics to backfire and come kick themselves right up the arse. Unfortunately although I have tried my best to position myself in gold to hopefully avoid this problem, I don’t think the general public will understand the potential for total economic collapse in places like the U.K., U.S.A., E.U. etc.[/quote]

that seems to be everyone’s conclusion.

I might just do it anyways. Kind of like a futures bet on a sports gambling site. I could lose it all, but if it comes through the odds will pay handsomely.

google.com/finance?q=AIG

Yup. That’s 66% in one day.

[quote=“bob”]
google.com/finance?q=AIG

Yup. That’s 66% in one day.[/quote]

I’d buy “raving mobs with pitchfork insurance” for AIG in the next couple weeks. I’m surprised they are up at all with President Obama saying he’ll try and take the bonuses back.

Stocks in general will be good from this point onwards. There might be bumps along the road, but the trend will be up, at least 30% for the index as a whole, from current values by the end of the year. Banks aiming for P/E ratios around 12 to 14. That’s my prediction for the Australian market. US and British banks reporting profitable trading conditions means the end is in sight.

It’s going to be a volatile rise too, I’m guessing, so if you are watching all the time it should be easy to grab short term gains, yes?

Anyway, here are a couple of links…

google.com/finance?q=Citigroup

google.com/finance?q=OTC%3ALEHMQ

[quote=“Deuce Dropper”]I’ve had a hard on for Citibank since their stock has plunged. is it worth buying? At this point I figure why the hell not throw $2000 on it?

Am I stupid, is this a good idea?

Please advise.[/quote]

That’s what I did. Except more than 2k. And before the whole nationalization/preferred roll over. So yah. Cheap is relative, it can always get cheaper. Worse part is it leaves a bad taste in your mouth that makes you miss out on the last 5 days rally. #*%#!!! But I’m not mad :fume:

Calling the bottom? Best of luck on that. My vote is bear bounce, then down again. And a few more times for a few more months. Still lots of structural issues out there, don’t get rosy just because some banks put out a news release (their track record is pretty spotty on that). But then who said the stock market listened to fundamentals? You guess is as good as mine.

Short term volitility has been awesome, lots of opportunities to make money, but remember it’s gambling, not investing.

Some in the industry advised this when it was at $19. I laughed. He is currently unemployed.

[quote]Calling the bottom? Best of luck on that. My vote is bear bounce, then down again. And a few more times for a few more months. Still lots of structural issues out there, don’t get rosy just because some banks put out a news release (their track record is pretty spotty on that). But then who said the stock market listened to fundamentals? You guess is as good as mine.

Short term volitility has been awesome, lots of opportunities to make money, but remember it’s gambling, not invest[/quote]

I hear what you are saying and in someways I wouldn’t be surprised at all if the banks were talking up the market and the actual reporting season shows that they are in the black due to a little creative accounting; however, I think it is reasonable to say that good banking assets have been oversold and that is true of stock markets everywhere. Sentiment will change quickly and the fiscal spending will be kicking into gear in the next few months. It’ll have an impact. I believe it is a bear bounce myself, but an encouraging one enough to scare the shorts. Whatever the case, in a years time stocks are going to be looking a hell of a lot more rosy than they are today. The fear has all but burnt itself out and leveler heads will prevail from this point forward. The market will recover to a level that reflects a recession that is only boasting 7 or 8% unemployment, record low interest rates, declining short-term inflation, and government guarantees at every turn and with banks reporting that they are turning a profit well shares have to be looking a lot better than a lot of other competing investments. Keep in mind that there are trillions and trillions of dollars waiting on the sidelines to be the first in.

That will all give sentiment a boost. Pay little attention to most reports coming out now for they are behind the curve–commissioned when fear reined supreme by knuckle-heads who got it all wrong in the first place.

Thanks fox.

On CNN yeterday they were saying that housing starts were up in February. I bet nobody saw that coming.

I think I’d go more with 2 yrs. The developing world has yet to wrap itself up in this mess yet, and China could divulge more problems soon (remember how long it took SARS to be announced, bad news takes awhile there).

Long term, buying now is a very safe bet. But I think waiting just a few more months is a better bet. Note I said better, not safer.

Well I put my money where my mouth is today and ponied up for a stack of bank shares and energy stocks. Time will tell if any folly will come of such foolishness.

That’s the beauty of it.

I’ve done nothing but lose so far (bought solar energy) and I am still impressed with that.

AIG and Citigroup will do very well when stability (transparency and accountability) begin to be established, no matter how much they lose through the sale of their toxic debts. They are just too cheap not to go up. Of course they’ll bob up and down, but the trend is up.

Someone who is definitely in a position to know whispers it in my ear and winks.

That is about as much as I think I know.

As City bank receive massive government bailouts they start a new construction project on some new fancy office suits for their executives. Not extensions for new employees I must stress, no! Just some new cool, funky, sweet pads for their hip zecks!
You show em City!

google.com/finance?q=NYSE%3AC

I am beginning to discern a pattern. Everything I say is wrong. You could make a fortune on that principle.

Calling the bottom? Best of luck on that. My vote is bear bounce, then down again. And a few more times for a few more months. Still lots of structural issues out there, don’t get rosy just because some banks put out a news release (their track record is pretty spotty on that). But then who said the stock market listened to fundamentals? You guess is as good as mine.

Short term volitility has been awesome, lots of opportunities to make money, but remember it’s gambling, not investing.[/quote]

I hear what you are saying and in someways I wouldn’t be surprised at all if the banks were talking up the market and the actual reporting season shows that they are in the black due to a little creative accounting; however, I think it is reasonable to say that good banking assets have been oversold and that is true of stock markets everywhere. Sentiment will change quickly and the fiscal spending will be kicking into gear in the next few months. It’ll have an impact. I believe it is a bear bounce myself, but an encouraging one enough to scare the shorts. Whatever the case, in a years time stocks are going to be looking a hell of a lot more rosy than they are today. The fear has all but burnt itself out and leveler heads will prevail from this point forward. The market will recover to a level that reflects a recession that is only boasting 7 or 8% unemployment, record low interest rates, declining short-term inflation, and government guarantees at every turn and with banks reporting that they are turning a profit well shares have to be looking a lot better than a lot of other competing investments. Keep in mind that there are trillions and trillions of dollars waiting on the sidelines to be the first in.[/quote]
Fox, IIRC, you’re an Aussie; I don’t know if you’re referring to Australian figures and markets in the above or the U.S. I think Australia is in much better shape than the U.S., and will be throughout this mess, but unfortunately the U.S. economy is so much larger and more integrated with the rest of the world’s that the global economy will be getting a lot worse this year, because the U.S. economy is totally boned.

The recent news about how Citigroup was turning a profit this last quarter wasn’t “a little creative accounting”, it was a deliberately leaked pack of lies. Citigroup is no more profitable now than they were a year ago. They still haven’t admitted to an estimated 60% of their losses – to be clear, that means another $900,000,000,000 of losses still being held “off the books” that they will someday have to admit – and there’s worse still to come with commercial real estate, which is really starting to tank right now. By the same token, I made over $100,000 last year (ignoring my losses of around $110,000).

Unemployment of “7 or 8%”? If you meant the U.S., at least, those numbers are a joke; they don’t include “discouraged” workers who are just too burned out to look for a job any more. The figure that’s usually cited in the media is the “U3” number. The more realistic figure is the U6 number, which is around 15% now. Both of these will be climbing over the next several months as more companies lay off workers, and as more companies go broke.
ritholtz.com/blog/2009/01/u3 … ment-data/

Consumer spending in the U.S. is collapsing. Expect many more retailers to go bust. Commercial real estate is already in the toilet; everywhere I go, I see empty shops, strip malls, car dealerships, purpose-built structures like auto mechanics’ shops, factories, you name it.

What we’re seeing over the last two weeks has been a bit of a breather after a major slide. The bounce might continue anywhere from a few weeks to a few months longer, but it WILL tank at some point.

Denninger keeps advising people to watch the bond market for a big kaboom; he thinks that will be the turning point for the hangman’s drop.

I should be clear that my interest is only in Australian stocks.

However, if the US government has given a blanket guarantee supporting bank stocks like Citi Bank then as long term buys they are a must. If you have a five year horizon, they must be good buys.