Another Teenager

by Larry Levin

The financials were hammered again today, bringing Citigroup into the realm of the teenager: it now trades with a 19-handle, closing down 5.83% at $19.69. Although many would like to find the Fountain of Youth, they certainly don't want that for their shares. Who would have thought in the spring of 2007 Citigroup would have made the discovery? Since then, its shares have gone from an aging old fogey of nearly $60, to a spritely teenager? This teenager can't drink, but apparently can drive...right into the ground - costing shareholders approximately $194,000,000,000.00 of market capitalization.

Joining Citigroup lower today was J.P. Morgan -2.9%, American Express -3.6%, Countrywide Financial -14.0% (FBI securities fraud investigations are apparently bearish), and Ambac -23.3% among others. Ambac Financial, last week's second coming of the Messiah, fell nearly 24% when Citigroup analysts said that the company's $1.5 billion share sale last week left the market unsatisfied and unconvinced about the firm. I wonder how those new investors feel.

The morning swoon was said to be caused by Bear Stearns rumors. When Moody's downgraded its Alt-A deals, the tape was hit with rumors that this would dramatically hurt BSC's financial stability. When the CEO refuted this rumor, the S&P quickly, but temporarily, reversed higher.

Fannie Mae & Freddie Mac were both pummeled today, with Fannie Mae losing 13% and Freddie Mac losing 11.5%, after a Barron's weekend report raised the possibility of a government bailout of Fannie Mae.

Hmmm, I recall the President saying, multiple times, that there would be no tax-payer bailout of the housing industry in any way. My-oh-my...how time (and the truth) changes things.

Crude oil traded north of $108-barrel today.

I saw an interesting interview this morning with billionaire investor Wilbur Ross. He believes the current market downturn differs from previous slumps in that no American banks have failed yet, but he suggests that's about to change. The Fed. chairman Ben Bernanke mentioned this at a recent Congressional hearing.

"I think that's going to be the next wave, and coupled with problems in the commercial real estate market; I think they'll be the next bubbles that burst, "Mr. Ross told CNBC's "Squawk Box" this morning.

When asked about the risks to big banks he said, "I think that the big banks won't fail in the sense that they will go to zero and depositors would lose money," Ross replied. "I think the Fed and other regulators will make things happen. I think it's the medium-sized banks and particularly some of those that got overextended with the subprime and other kind of mortgage debt. I think those are the ones that had the serious mismatch, making 20- and 30-year loans based on 90-day deposits."

Real Time Trading Signals*for

Trade Date: 3/10/08

E-Mini S&P Trades*
(before fees and commissions):

1) VA buy @ 8:35am at 1291.00 = -1.50 & -1.50

2) VA sell @ 9:35am at 1291.50 = b/e (1 lot)

3) Engf sell @ 11:05am at 1282.25 = -1.75 & -1.75

4) FT sell @ 11:55am at 1287.50 = b/e (1 lot)

5) OTF buy @ 12:30pm at 1282.00 = b/e (1 lot)

6) Momo sell @ 1:15pm at 1280.00 = +6.50 (1 lot)

7) FT sell @ 1:35pm at 1279.00 = -1.75 & -1.75 (big SP only traded 1280!!)

8) Momo sell @ 2:40pm at 1277.00 = +2.00 (1 lot)...-1.50 points

E-Mini Russell Trades*
(before fees and commissions):

1) Sell @ 8:44am at 659.4 = +2.0 (1 lot)

2) Sell @ 8:58am at 658.0 = -1.3 (1 lot)

3) Sell @ 9:10am at 657.8 = -1.0 (1 lot)

4) Sell @ 11:10am at 651.5 = +.5 & b/e

5) Sell @ 1:14pm at 649.0 = +2.5 (1 lot)...+$240


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