This morning futures are pointing lower. Is today the day we take out the 741 level on the S&P? I say yes! Gold is up $12 to 954. I look for a nice close today in the shiny metal. Remember it is Friday and what has Gold done every Friday the past month? Closed higher going into the weekend. The big news of the morning is Citi to Exchange Preferred Securities for Common, Increasing Tangible Common Equity to as Much as $81 Billion. Our Beloved Government will exchange the portion of its existing preferred securities that is not exchanged for common shares into new trust preferred securities. These securities will carry an annual coupon of 8 percent. So the Government will own 36% of Citi (C).
No matter what they say, the banks are being NATIONALIZED. Maybe the stock market this morning suddenly realized that investing money in Citi (C) stocks so that the bank can lend money to another bank who will lend money to a hedge fund who will buy C calls isn’t such a good business model. Now you may as well count Bank of America (BAC) in the same plan. One is as rotten as the other, both run by crooks, overpaid boards, etc. Put the bunch of both banks in jail until they come up with everything paid them in the last five years. Once the Government commits funds to a failing company they can’t stop because they’d be admitting a mistake, even the change in admin can’t force this fundamental admission.
CITI (C) , (AIG), (BAC), (GM) will cost The Tax Payers (yes you and I) $trillions and we’ll be paying for eternity.
