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Michael Gracie

Finance quote of the month – February ’09

Jeff Matthews:

In fact, at yesterday’s close of slightly north of $2.50 a share, you could give up your morning Starbucks latte and instead buy a share of Citigroup stock, with enough change left over to buy a share of Fannie Mae, if you really wanted to speculate.

Rich, and almost makes you feel the same. Particularly if you don’t care for Starbucks coffee.

Links for the Lazy – 1/15/09

Mixed bag

    Technology

  • Google starts axing services, but Google Reader is safe for now. There might be something to all that attention data value, but it isn’t going to benefit you anyway. I’d be looking for a substitute reader (preferably desktop) just in case.
  • New Yahoo! CEO Carol Bartz on the [first] dotcom bubble“I’d go to investor conferences—with standing room only at presentations by Used-Fucking-Golfballs.com—and I’d get four shareholders listening to me.” I love it.
  • XRDS-Simple at home – I’ve added Will Norris & Company’s WordPress plug-in to the previous OpenID install. Now I do my OpenID logins here instead of at a third party. As expected, works nicely.
  • Finance

  • Ready to play The Bailout Game? Personally, no. Like Hasbro with Scrabble, Parker Brothers will probably sue the makers for the likeness to Monopoly, and when that doesn’t work out they’ll join the RIAA in suing the players.
  • TED spread shrinks, so the TARP is working – Greg Mankiw concludes as such, although Citigroup and B of A equity investors might want to hold on doubling down right now.
  • Do you know what the multiplier for government spending means for you? You might want to brush up, as with the amount of public cash being dumped into failing institutions to compensate for idiocy, Zimbabwe-style currency destruction could be in your future.
  • Fly Fishing

  • Cuba Releases Hemingway Archives – Fishing Jones has more.
  • Strike indicators find love – Call it a bobber if you like, but I always laugh when high-profile guides talk about how they always see the fish eat the nymph. While using indicators.
  • Winter sucks – But the Frying Pan makes it more than tolerable.

Adieu.

Wells wins Wachovia – Citigroup Whines (UPDATED)

Citigroup thought it had Wachovia in the bag – a couple of billion and an FDIC backstop seemed quite the rosy deal. Now Wells Fargo has come along and offered $15 billion, without discernible government assistance.

What does Citigroup do about this? Whine like sissies while hiding behind their lawyers.

Citi is a member of the private club in the burbs, and they just got walloped by the scratch player that hangs around the municipal course. It’s not apparent whether Citi had a breakup fee in the deal, but if they didn’t they should fire their lawyers.

If they proceed to court, everyone should ask themselves why Citi couldn’t do something without government guarantees. And whether they want their tax money backing Citi’s thinly veiled turnaround plan.

UPDATE: WFC gets to accelerate use of Wachovia losses. Take it for what it’s worth: on one hand, this means the deal still ostensibly uses government money – on the other hand, it means Wells Fargo expects to have some earnings.

UPDATE 2: Whining works for now – Citi Granted Emergency Injunctive Relief Extending Exclusivity Agreement between Citi and Wachovia.

Citigroup to shed $500B in assets

Some might say “ouch” over a 23% reduction in size. But shedding non-core and/or underperforming assets is part of Turnaround 101. I wouldn’t be surprised if CEO Vikram Pandit’s plan works.

Shrinking isn’t necessarily bad.

UPDATE: Forbes – “The bank’s new chief begins the slow, painful job of undoing his predecessor’s work.”

No pain, no gain?

Moody’s Says Citigroup SIV Debt Ratings Under Threat

Much more of this to come, whether teachers get paid or not.