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IBDvalueinvestin (98.36)

Even Good news makes Stocks CRASH LMAO, its so good being a BEAR



February 27, 2009 – Comments (7) | RELATED TICKERS: C , WFC , ZION

When the Government did not save Lehman stocks went on a historic 3 month Crash Sept-Nov. 

Now the government does the opposite and saves Citicorp and bank stocks crash on good news that Citi won't go bankrupt in the near-term. HMM sounds like its just too easy being a BEAR in this market. No matter what the news is stocks will go down.

NEW YORK – The U.S. government will exchange up to $25 billion in emergency bailout money it provided Citigroup Inc. for as much as a 36 percent equity stake in the struggling bank.

The deal announced Friday — the third attempt at a rescue plan for Citigroup in the past five months — is contingent on private investors also agreeing to a similar swap.

The aim is to keep the New York bank holding company alive and bolster its capital as it faces growing losses amid the intensifying global recession. Existing shareholders would see their ownership stake shrink to as litte as 26 percent and the bank said it is eliminating all dividends on common shares.

Investors appeared disappointed in the deal and expected dilution of their stake, sending shares plummeting 94 cents, or 32.8 percent, to $1.56 in premarket trading. The news also dragged down stock futures ahead of Friday's market opening.

7 Comments – Post Your Own

#1) On February 27, 2009 at 9:06 AM, Varchild2008 (84.20) wrote:

Stocks down more so on the negative 6.2% GDP (revised) for 2008.  The market at 7,000 wasn't pricing in that big a fall in GDP numbers.  The 6.2% GDP drop also has to be put into perspective with the fact that we all know the GDP dropped in January and February as well.

So.. What Good News are you talking about?  Oh Citigroup was nationalized... Yea... That's a Rally Call to Buy more Bank Stocks.

Do you realize that it isn't about whether a bank gets to exist or not when it comes to our markets?  It is about what the impact is to Shareholders and the implications that BAC and MI and all other banks teetering off a cliff could also be nationalized.

You have to look at the big picture not just whether not there still exists a McDonalds or a Walmart near where you live.

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#2) On February 27, 2009 at 9:06 AM, cbwang888 (25.64) wrote:



Only a few big banks are not zoombies, JPM and GS. They are still overvalued, though.

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#3) On February 27, 2009 at 9:17 AM, IBDvalueinvestin (98.36) wrote:

GS is not a bank.

WFC is a bank not a zombie

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#4) On February 27, 2009 at 9:42 AM, IBDvalueinvestin (98.36) wrote:

The over -6% GDP rate suggest we will go down -65% from DJIA high of 14,000

That -65% drop in the DJIA would match the drop of the 1929-1932 DJIA drop.

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#5) On February 27, 2009 at 9:46 AM, abitare (30.20) wrote:

WFC = dead man walking

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#6) On February 27, 2009 at 10:56 AM, Billullo (< 20) wrote:

GS will become a bank

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#7) On February 27, 2009 at 11:06 AM, tfirst (58.24) wrote:


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