• 24 Nov 2008 at 12:27 AM

Ok, Ok, But This Is The LAST TIME

Citi will get $20 billion in cash from the TARP and a $306 billion loan guarantee. The closing fee? The government gets preferred shares in Citi.
Now shape up, mister.

Comments (67)

  1. Posted by guest | November 24, 2008 at 12:34 AM
  2. Posted by guest | November 24, 2008 at 12:39 AM

    That’s exactly what we need – if Citi really is solvent, the shorts (or those long CDSs) need to feel some pain and have some fear.
    The article on the WSJ about MS’s terrible days in September shows just what kind of crap is happens on Wall St.
    Who was shorting MS? Why it was Merrill, Citi, and DeutscheBank.
    Until the short-the-financials-into-oblivion trade is made painful, there is no incentive to be long them.
    Who is short Citi or long their CDS’s? Tomorrow might be a pretty painful day for them…

  3. Posted by guest | November 24, 2008 at 12:45 AM

    Important element of the deal and effect on stock market is discussed below:
    http://www.marketwarnings.com/2008/11/credit-crisis-and-c-citibank-stock-deal.html

  4. Posted by guest | November 24, 2008 at 12:51 AM

    TGFD is wondering WTF is going to happen to the 2,500 shares of Citi I bought late Friday afternoon(3:57pm) at $3.65. I’m being honest when I say, “TGFD doesn’t have a f’n clue.”
    @#2…
    I’m neither short C, nor long their CDS’s. I guess being long C is not bad right now?
    The Guy from Delaware

  5. Posted by guest | November 24, 2008 at 1:02 AM

    The financial complex will rip. Friday buyers of UYG will be dancing, especially whomever bought 28000 calls at 5. He is my hero.

  6. Posted by VOL IS KING | November 24, 2008 at 1:03 AM

    What about the other $2.3 trillion? This is even fucking worse than doing nothing….

  7. Posted by Lowly Assistant | November 24, 2008 at 1:05 AM

    TGFD,
    Welcome to the Pain Cave.

  8. Posted by VOL IS KING | November 24, 2008 at 1:05 AM

    @5 I sold the NOV $7.5 calls and bought the $15 puts can I be your hero too?

  9. Posted by guest | November 24, 2008 at 1:07 AM

    @8 You will have a loss for the win on that trade

  10. Posted by VOL IS KING | November 24, 2008 at 1:10 AM

    I will have a loss for the win? Nov $15 puts Nov $7.5 calls

  11. Posted by guest | November 24, 2008 at 1:23 AM

    Vol…you will be buying those calls back higher…and ur deep in the money novs will come off like a prom dress

  12. Posted by guest | November 24, 2008 at 1:27 AM

    @3 oh please…

  13. Posted by VOL IS KING | November 24, 2008 at 1:29 AM

    Hey moron, I put on that trade back in october. Today is expiration I won’t have to buy shit back genius.

  14. Posted by guest | November 24, 2008 at 1:36 AM

    Then why are you posting here..its the best trade of your life if you sized it

  15. Posted by guest | November 24, 2008 at 1:48 AM

    EP is hot…i think she understands that the genitalia of short sellers (balls included, of course) are just ‘way more super’ than regular trader’s genitalia…
    she be right…
    I Have No Hedge For Polyannas

  16. Posted by guest | November 24, 2008 at 1:48 AM

    damn it i spent all these years paying fees to citibank for this and that and now its going to come out of my taxes too? wtf. i am moving to minnesota and opening an account with USB.

  17. Posted by guest | November 24, 2008 at 1:51 AM

    @4 — You’re long C now.
    Should have taken that $8K and went to AC for some roulette and strippers.

  18. Posted by ep | November 24, 2008 at 1:54 AM

    TGFD:
    I like your C trade. Seriously. Will be interesting to see where it goes at the open. Could have been a great call.

  19. Posted by guest | November 24, 2008 at 2:18 AM
  20. Posted by VOL IS KING | November 24, 2008 at 2:29 AM

    @ep:
    write the DEC $15 puts and $2.5 calls buy 2 $5 puts buy the 3 $5 calls. get it, got it, good.
    Superior downside protection to TGFD’s long citi trade, and more upside due to gamma and leverage.

  21. Posted by guest | November 24, 2008 at 3:13 AM

    The carry trade is BACK (how to claim your piece of the juicy action)
    http://financialtraders.blogspot.com/2008/11/carry-trade-is-back-how-to-take-your.html

  22. Posted by ep | November 24, 2008 at 4:11 AM

    Vol:
    Granted, I haven’t run the numbers on these specific options, but the volatility in the stock has been so high, option plays seem dangerous to me. Still, creating a synthetic long with the downside protection you imply along with some added gamma exposure does have its appeals.
    Where are ATM C options Imp. Vol. wise and how’s that compare to the 15/30 day moving average for Vol.?

  23. Posted by VOL IS KING | November 24, 2008 at 4:53 AM

    NO NO NO EP.
    EP you spent one too many days business school. Lets remember that 1) IV is a violation of Black-Scholes and 2)Black-Scholes is based on CAPM. If you don’t think CAPM works what are you doing using Black-Scholes?
    The options trade is in fact much safer than a long or short position in the underlying.
    Firstly this is a long-short volatility trade, you’re short more vol than you’re long so should volatility come in you would make money on your short calls and long puts. You would initiate that trade for a net credit.
    Forget about the implied volatilities of the options individually simply look at the skew (the relative prices of the options). The implied vol for the ITM Puts is ways too low, the implied vol for the ITM calls way too high AND they contradict each other. If those puts are trading so close to intrinsic how can the calls be worth so much? The puts are implying there is no chance the the stock is going back up, the calls are saying the stock is definitely going up!
    So short the puts trading at intrinsic (theory dictates they should have been exercised anyway) and short the high IV ITM calls take the proceeds and buy (at least) 2x the cheapest straddle, such that you’re net long more (both puts and calls) options than you’re short.
    Gamma is your friend EP, it works against the ITM options and for the ATM and OTM options. Since you’re always long more options than you’re short realized volatility works in your favor regardless of the path of the underlying.
    I’m not sure if you should actually do this though, hedging gets a bit complicated. Easiest thing to do is just buy the ATM straddle sell your 2x ITM options as the underlying moves. Just start with small size, say a 10th the size you would put into a long citi trade. Just remember, you never want to own ITM options unhedged so if citi goes to $10 you’re buying $10 puts to hedge your gain on your $5 calls and your short $15 puts. And you’re buying $10 calls to increase your return should citi continue to go up. .

  24. Posted by guest | November 24, 2008 at 5:55 AM

    All of this and Pandit keeps his job? That is obscene.

  25. Posted by VOL IS KING | November 24, 2008 at 6:04 AM

    @24:
    Pandit the Bandit didn’t blow up Citi. Morgan Stanley on the other hand, he probably did blow up…. Anybody got any word on the how much MS’s stat arb desk has lost? When the losses from that shit show hit the wire, it’ll be say good night Mack the Knife.
    EP MS would make a better trade, Citi is in AIG-Fannie mode now who knows how that thing is gonna trade. The gvernment has put in 2x as much equity from the TARPas than Citi’s market cap.
    @Guy From Delaware sell your shares in the pre market, get out while the gettin is good you’ve made a sufficient return, I trust..
    GE is next

  26. Posted by trojan | November 24, 2008 at 6:14 AM

    Vol: i took your class at stern

  27. Posted by guest | November 24, 2008 at 6:24 AM

    Re: enhanced executive compensation restrictions. This is good news for shittybank analysts and associates, bigger share from the bonus pool since the big guys now have a cap. C*nts

  28. Posted by guest | November 24, 2008 at 6:25 AM

    Re: enhanced executive compensation restrictions. This is good news for shittybank analysts and associates, bigger share from the bonus pool since the big guys now have a cap. C*nts

  29. Posted by guest | November 24, 2008 at 6:47 AM

    I dont understand.
    On Friday Citi was safe and sound and the only problem was the rumor mongering of the evil short sellers. What happened over the weekend?
    Are the evil nake short sellers now active on Saturday and Sunday as well?
    Vikram Bandit should really try hard to get a new short sell ban – while he still has a job.

  30. Posted by guest | November 24, 2008 at 7:00 AM

    @ 27 – seriously? that’s a fucking joke

  31. Posted by guest | November 24, 2008 at 7:04 AM

    27 is a wishful thinking analyst. he may just be right, though

  32. Posted by guest | November 24, 2008 at 7:16 AM

    @ 27 Moron
    @ 29 Idiot
    Why are there so many retards on this blog lately?

  33. Posted by guest | November 24, 2008 at 7:17 AM

    27 should be lucky to have a job. Shitibank need to do more firing, starting with Pandit

  34. Posted by guest | November 24, 2008 at 7:23 AM

    @ 32, doesn’t it make sense? they will still pay bonuses, but with a limit at the top end = more for bottom end? And no, I am not an analyst.

  35. Posted by guest | November 24, 2008 at 7:28 AM

    Just read the term sheet and might be sick.
    @34 They are not going to pay anyone more because they get less. That is just idiot logic. Especially not a 25 year old whose main “value add” is flagging typos and kissing ass.

  36. Posted by guest | November 24, 2008 at 7:35 AM

    @ 34 bonuses will probably be same as last year for the 15 an/as/vp that keep their jobs

  37. Posted by guest | November 24, 2008 at 7:41 AM

    Good morning. ACTUALLY I’m with 34. Bonus should be steady for ’09 so long as Shitti doesn’t go under (i.e. need to replace board asap)
    SPODE

  38. Posted by Investorcluzo | November 24, 2008 at 7:41 AM

    @tgfd – c is $5.50 pre market, take the money and run! no time for trying to put on intricate strategies, the market is not rational. way to step up on friday.

  39. Posted by guest | November 24, 2008 at 7:46 AM

    Wasn’t good bank/bad bank the plan for LEH? Why is it viable now but not then? What was it about LEH that made them not bailout material?

  40. Posted by guest | November 24, 2008 at 7:47 AM

    @37 come on…you really don’t think bonuses will be down? I hope you’re not making personal budget decisions based on that assumption.

  41. Posted by guest | November 24, 2008 at 7:50 AM

    Holy shit! for the cost of 3 weeks in iraq (direct costs – lets ignore the massive negative externalities) we can save Citi and the economy>????
    where were all the fuctard conservatives when we spent the first 600 billion (cash down the shitter) in iraq?

  42. Posted by guest | November 24, 2008 at 7:56 AM

    Obama will bring in executive pay restrictions. Banks will reshuffle compensation, mark my words analyst salaries will increase

  43. Posted by guest | November 24, 2008 at 7:58 AM

    ahahaha and Obama will get his “redistribution of wealth”. lol

  44. Posted by guest | November 24, 2008 at 8:01 AM

    @43 a sick version of centralization?
    @42 analyst increase, no. VP & directors, maybe.

  45. Posted by guest | November 24, 2008 at 8:03 AM

    I’m working @citi SB and we have had to use the defribulator twice this month so far.

  46. Posted by guest | November 24, 2008 at 8:04 AM

    Citi = the largest cluster f#ck…Thanks Sandy, Chuck, and Viram.
    I look forward to paying for your incompetence as an allocator of capital, not as a shareholder, but as a taxpayer.

  47. Posted by VOL IS KING | November 24, 2008 at 8:28 AM

    @ic:
    I told him to sell into the pre market strength.

  48. Posted by guest | November 24, 2008 at 8:32 AM

    Shorts panicked in pre-market. If you went long on Friday, you can make 50% in a few trading hours. In my universe, you take that.
    I’m not short C because there was no meat left on the bone, as Macke would say (I like that quote; only good thing to come out of Fast Money).
    This deal is brutal for C going forward, but it means they are not going out of business. Price stock accordingly.

  49. Posted by guest | November 24, 2008 at 8:36 AM

    this market is going lower..SPX closes down on Monday. This bailout isnt enough.

  50. Posted by guest | November 24, 2008 at 8:39 AM

    Citi rules the Street, like it or not

  51. Posted by bondguy007 | November 24, 2008 at 9:47 AM

    Let me take you back exactly one week ago. Bess, were you aware last monday was opposite day??????
    http://dealbreaker.com/2008/11/vikram-pandit-we-will-be-the-l.php

  52. Posted by guest | November 24, 2008 at 10:03 AM

    TGFD- Did you sell out of your position yet? Could’ve made a nice little profit. Good Call.
    Also, moving back from nyc to the philly area any advice on where to look for jobs in wilm and/or philly

  53. Posted by guest | November 24, 2008 at 12:10 PM

    @#52…
    TGFD has not yet sold out the Citi position. Right now C is at $6.00. Not sure what to do.
    Let me think about jobs in Wilm or Phila for you. What kind of job are you looking to get? I may be able to steer you in the right direction. I’ll try.
    Let’s continue on this thread.
    The Guy from Delaware

  54. Posted by guest | November 24, 2008 at 12:31 PM

    @#52…
    TGFD put this thread into my ‘favorites’ so I can check back on it easily.
    The Guy from Delaware

  55. Posted by guest | November 24, 2008 at 3:31 PM

    not sure exactly what im trying to get into. possibly trading or analysis but started in compliance then moved into analysis work. Any suggestions.
    Howd the trade work out?
    thanks again for taking time to help

  56. Posted by Investorcluzo | November 24, 2008 at 4:03 PM

    @49 – did you make any money today…or are you less of a trader than tgfd?
    I said it before, I’ll say it again: the market can stay irrational longer than you, me or dupree can stay solvent. there is no meaning to this madness…tgfd, don’t get greedy.

  57. Posted by guest | November 24, 2008 at 4:39 PM

    cluzo@#56…
    Thank you for the “tgfd, don’t get greedy” advice. I put in a trailing stop loss for 50 cents that ultimately would have triggered at $5.66 on 1.5k of the 2.5k shares. C didn’t get there and the ‘sell’ expired at day’s end. I may put a TSL on the whole 2500 C tomorrow. Maybe I should just quit f’g around and take a profit on the 2500 shs. I trust what you say.
    @#55/52…
    I’m still trying to come up with something for you. My contacts are limited, and Del’s unemployment rate is rising. All the big banks are here including Citi (C = over 1k employees). Mostly credit card stuff, though.
    If I may ask, how long have you been on Wall St? I know a few guys here in PE who may need someone.
    I’m touched that you’ve asked TGFD for help.
    We’ll communicate on this thread.
    The Guy from Delaware

  58. Posted by guest | November 24, 2008 at 5:03 PM

    cluzo@#56…
    One more thing. It appears that the guy who bought the 12.8 million C shares yesterday at the close at $3.71 sold 75% of them today at the close. Looks like he got around $5.90. Nice, $20 million profit.
    The Guy from Delaware

  59. Posted by VOL IS KING | November 24, 2008 at 5:21 PM

    Hey TGFD i told you to sell too TGFD, and before cluzo for that matter.

  60. Posted by guest | November 24, 2008 at 5:42 PM

    VOL@#59…
    Please accept TGFD’s apologies; you are correct. I remember – you did say to sell. Your advice also seems trustworthy. Thank you for reminding me.
    I guess my C shares will have to wait till tommorrow. TGFD hasn’t done any after/pre market trades. I’m a bit skittish about them.
    The Guy from Delaware

  61. Posted by VOL IS KING | November 24, 2008 at 7:26 PM

    @TGFD, limit orders, limit orders! Put in a limit order for $5.95. Please never ever ever use a market order again in your life, its just a free pass for your broker and the market maker to steal from you.

  62. Posted by Investorcluzo | November 24, 2008 at 7:26 PM

    @vol – no worries bro! you’re still first. I missed your post, didn’t mean to pile on. like I said yesterday, you can lead a horse to water, but you can’t make him drink. wish I had the cash to buy 12.8 mm shares.

  63. Posted by guest | November 24, 2008 at 7:37 PM

    the guy that runs ibankingoasis web site is a huge fag. his name is patrick and he is a grad student at a school in boston…. go find him and make him eat your ass

  64. Posted by VOL IS KING | November 24, 2008 at 7:42 PM

    @IC: i don’t know why any one would want 12.8mn shares in citi you could just buy 12.8 mn in Fannie Mae or AIG and have the same thing, but do synthetic long if you must, write the puts and buy the calls…but really…. barf…. run away, and short MS their stat arb desk must be blowing up like the world trade.

  65. Posted by guest | November 24, 2008 at 9:15 PM

    tgfd- been on wall st for 2 years. grew up in philly though and am going back. I know most of the banks have offices down there but I thought most were just credit card operations down there and im not looking to get into that. I have a steady job up here so I may have to stay since my search down in that area doesn’t seem to promising since no one is hiring really. Thanks for the advice.
    Good luck with Citi tomm.

  66. Posted by guest | November 25, 2008 at 9:21 AM

    VOL@#61…
    Thanks for the advice. Do you mean limit order on the buy or on the sell? I bought Citi Friday at market (got lucky @ 3.65), And put in a trailing stop loss @ 50 cents Monday. Citi never went down 50 cents after I put in the sell order.
    @#65…
    The two guys I know personally have their own firms that do consulting work for PE, M&A, and other things that TGFD doesn’t understand. I know them socially, and I see them frequently.
    Also, a number of the big banks here in Wilmington are not just into credit cards. BAC isn’t one of them since their credit cards are based here.
    I can discuss only so much with you out in the open.
    Citi is up in the premarket.
    The Guy from Delaware

  67. Posted by guest | November 25, 2008 at 10:16 AM

    @#65…
    One other thing. TGFD spoke to the Delaware Office of Economic Development recently, and I found out that BlackRock is still committed to filling the 300 jobs they promised the state back in the summer. I know BlackRock laid off people recently, but the 300 new jobs here do not appear to be affected. Their location is the Bellevue Corporate Center, a beautiful place actually, right in the middle of a state park, north of Wilm, and just off I-95. They said the jobs were for brokers and administrative types. It might be worth your time to check with BlackRock.
    The Guy from Delaware