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It Goes Uppity Up,Up

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Citi Group Financial (Toronto) by michael_sanford.

By David Glenn Cox

The last pillar of faith is a fanatical belief. Despite all logic, is
this reliance on some unseen guiding force that will rescue us. It will
strike down schoolteachers with illness so that we may have another day
to study before the big test. It guides rescuers to find the lost. The
rescued give praise, all praise above while the rescuers just scratch
their heads.

As the investment banks and brokerage houses
advertise their strict adherence to market fundamentals and
mathematical projections. The Stock Market falls prostrate and shouts
praises to his Holy name. The market soars up 300 points, “We are
saved,” they shout, Citigroup earned a profit in the first two months
of the year. “Maybe I can buy that house in the Hamptons after all,
maybe they will bring our bonuses back! Oh, praise his name we are

Citigroup’s stock had risen to a $1.41 by twelve o’clock
a 34% increase in one day. It’s a good sign; maybe this is the bottom
for financials? Bank of America’s stock also rose, sure, why not? If
Citi made a profit then I bet Bank of America could just as easily. GE
is up 16% as is JP Morgan Stanley and Wells Fargo oh, hallelujah,
praise his name!

Castaways on desert Islands see phantom ships
sailing across the horizon; those lost in the desert see water mirages.
It is that belief that we will be saved in the face of all logic and
reason. So it is only logical for stockbrokers and pundits to behave as
if the second coming is upon us. Their world is broken and fractured
into a million shiny pieces. Those working on Wall Street today will
never ever live long enough for those good old days to return, so we
can excuse them if they behave exuberantly when the clouds clear and
they strain by moon light to see if Tara is still standing.

are living in a fantasy; Citigroup sold for $57.00 a share a year ago.
So its rise from a buck and a nickel ain’t no great shakes. But they
made money! They made money in the first two months of the year! How
did they make all that money? They started by laying off 52,000
workers, that always helps the bottom line. Then they sold off Smith
Barney Brokerage for 2.7 billion dollars then they sold off Primerica
Financial Services for another $7 billion dollars. It is as if
Citigroup is having a yard sale and yelling. “Look Ma! I’m rich!”

has also sold its stake in the Japanese brokerage house Monex and has
closed branches in this country. Citi has lost money for five straight
quarters; just last week Republican Senators called for an end to
bailing out failing banks, coincidence perhaps? Now this blessed news
Citigroup made money in the first two months of the year. Citigroup was
a sinking ship throwing off her cargo to try and stay afloat and now it
appears that she might make it into port but what does she have left to

This Holy News was in the form of an internal memo by
CEO Vikram Pandit that the bank was profitable in the first two months
of the year. Pandit expressed disappointment with Citigroups stock
price, which he wrote, was based on misconceptions about the banks

“If we’re not at a bottom, we’re a pretty close,” said
Michael Binger, Minneapolis-based fund manager at Thrivent Asset

Bloomberg, “You have to be a little suspicious of
what these major financial leaders say because some of the things
they’ve said in the past haven’t been forthcoming,” said Randy
Frederick, director of trading and derivatives at Charles Schwab &
Co. in Austin, Texas. “Citigroup is the poster child for this whole
financial meltdown.”

“Global stocks rose Tuesday on optimism
over the global economy as top U.S. officials on Monday urged other
countries to step up spending to combat recession. But experts
interviewed on CNBC see this rally as fragile and short-lived.”

you wonder how NASA ever let that bunch get passed them. Citigroup has
sold off it most prestigious and in the good times prosperous assets at
fire sale prices then on a leaked internal document stocks soar? Did
they forget so quickly? Citigroup has received $30 billion in bailout
cash; that the US government and the US taxpayers are on the hook for
306 billion dollars more in loan guarantees.

Only a trip to
Lourdes could bring about a greater belief in miracles. Pandit’s claim
that Citigroup has been profitable is a naive ruse. Making money for
two months is not how you gauge your future, farmers only make money
one or two months a year. You can’t just pick two months at random and
say, “See how good we’re doing?” It’s “The Little Engine That Could”
strategy, “I think I can, I think I can.”

It is in fact a
cynical ploy, a rainmaker promising rain in a drought, a snake oil
salesman selling a miracle cure to the terminally ill. Trying to change
the dynamic through placebo prescriptions. So today they party like its
2005 but soon. Tomorrow maybe, reality will set back in, Tara is gone.
There is no ship on the horizon, there is no water to drink and there
are no more good times on Wall Street or on Main Street.

It is a
market that no longer operates on fundamentals it operates on fear and
hope alone. It is a refugee status, maybe we will be saved or maybe we
are all doomed for tomorrow it goes downdity, down, down. They run in
fear and bluster in faith they boast just to convince themselves
because all they have left is hope and fear and fear is just the
absence of hope.

photo by michael_sanford