So the news today is all about Citigroup sparking the huge rally. Not knowing what the market's reaction would be I absorbed the news with skepitism when I heard it this morning, hours before the market open. Well turns out there's at least some credit being given to Pandit's (Citi's CEO) comments about 'operating profit' through the current quarter sparking the rally.
So what's the truth? I hear 'operating profit' and I start thinking CEO spin...sounds like 'Operating cash flow.' Here's what I'm believing...Pandit doing his best to put a strong positive front out in the public without doing something that will get him time. So, when he says operating profit, he means 'operating cash flow' and turns out Citi has had positive operating cash flow for the last year. In fact the Q4 2008 Operating CF was 96 Billion. What this means it that Pandit states a common truth, the market takes it and runs and it avoid the true issue, which is likely that they will continue to suffer huge investment losses on things like MBS and other investment vehicles that are imploding.
Just my thoughts. But if you were day trading today you at least didn't have to dump at a loss at the closing bell. Thank you Mr. Pandit.
Friday assorted links
2 hours ago