ES -- DX/CL -- isee -- cboe put/call -- specialist/public short ratio -- trinq -- trin -- aaii bull ratio -- abx -- cmbx -- cdx -- vxo p&f -- SPX volatility curve -- VIX:VXO skew -- commodity screen -- cot -- conference board

Thursday, March 05, 2009


citi breaks the buck

C trading under $1 today, as chris whalen writes:

Not only is the State of New York and the other jurisdictions where AIG operates ready and able to deal with an insolvency, but we should not miss the opportunity to put the entire CDS market to the sword as well. Remember, once we begin the inevitable unwind of AIG and Citigroup, the beginning of the end of CDS and the derivative nightmare on Wall Street will have begun.

More, the US government cannot fund the operating losses of Fannie, Freddie, AIG and C. We do not have the money. Between now and the end of March, IOHO, the markets are going to force a resolution of AIG and C. We may never even see the much discussed stress tests promised for April by Secretary Geithner.

As we discussed with Josh Rosner and will be writing about same next week, Treasury Secretary Tim Geithner and Fed Chairman Bernanke think they are driving this process, but in fact the markets are setting the agenda. Either we act now to deal with AIG and C and take these names off the table before the other zombies arrive for the dance party, or we risk being overwhelmed. If we have a choice between preserving the credit standing of the US Treasury and flushing AIG, C and every other CDS counterparty on the planet, we'll take the latter every time.

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For about two years one of my stock comments has been, "We kill the banks or we kill the dollar".

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