I need to follow up with the AIG story. When you start seeing stories like this then you know we are getting close. Patience is required.

Charlie Gasparino over at Fox Business News reports a rumor that the government may be looking to dispose of its 27% Citi stake at some point over the next 3 months. Logistics aside, presumably somehow this means that even more bankrupt companies like AIG, FNM and FRE are probably next in line for offloading the taxpayer stake into the hands of hapless hedge/sovereigns funds. We hope it is not the same hedge funds that have recently received subpoenas and C&D orders from ever shorting the euro (i.e., going long the dollar).As a reference point the gov't owns 27.01% of Citi which has a hilarious market cap of $108 billion, and owns 80.66% of AIG with its $23.5 billion capitalization (and $107 billion in debt). This explains why the government is now actively pulling the borrow: gotta sell at the highest possible price.

The U.S. government, looking to unwind its investment in the banking system following the near-collapse of the financial system in 2008, is discussing plans to sell its massive stake in Citigroup, possibly as early as this spring, FOX Business has learned.

Previously, federal officials, including Herbert Allison, who heads the Troubled Asset Relief Program, have said that they plan to unload the government’s 27% stake in Citi over the next year. But FBN has learned that in private meetings with Wall Street investment bankers, the federal government is discussing the possibility of doing it sometime over the next three months.

Meanwhile, Doug Kass reports that a rumor of "new stringent short-selling rules is causing a squeeze in heavily shorted names this afternoon."

Last but not least, here is the rumor as reported by Seeking Alpha.

So yes, it appears we are back to the joyful days of late spring 2009 when the rumorsphere drove crap financials into the troposphere, even as nobody knows anything, and rumors are generated simply to explain massive short squeezes.

 

Comments

Add New Search RSS

Write comment

Name: Email:  do not notifynotify Website: Title: UBBCode:         -color-aquablackbluefuchsiagraygreenlimemaroonnavyolivepurpleredsilvertealwhiteyellow -size-tinysmallmediumlargehuge     Please input the anti-spam code that you can read in the image.

Powered by !JoomlaComment 4.0 beta2

---