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THE
MAGNIFICENT SEVEN
Over the course of a number of mergers, Citicorp picked up sixty-three accounts of old an bank robber (see Pinochet/Chile/CIA) and some of the underwriting has been suspect of late (One-Eyed Jack/WorldCom/Enron/Parmalat/Global Crossing/Japan/European Bond Market and paying over $2.65 billion in settlement fees ($400 million in fines) in recent years for putting lipstick on doubtful nags), but whose counting with 140 million+ customers worldwide and $242 billion in capitalization. This makes it the largest financial “services” Stagecoach in the world and this Stagecoach is greased with big money wheels, Baby. Citicorp has also moved into Mexican and Asian banking sector for growth. In the end, it is all about the bottom step of the Stagecoach Line (“make those horses meet the numbers” and keep the Stagecoach running on time in Asia). Let us see if the Saudis will be happy or glad with their stagecoach partners in the future. A Financial Sarsaparilla (Citigroup, CIA, AT&T, AMEX, Political Parties, Saudis, Citicorp Venture Capital, Banamex, Nikko Cordial, Morgan Stanley, Fed, CVC Capital Partners, Carlyle Group, and Chile Con Carni) - Bring to a slow boil by 2012 and season to taste: Charts 1 - 3 show the Magnificent Longwave (Weekly) Cycles as they look riding thru Big Banking and into the future. The main “horseys” are 8, 11, 23, 38, 50, 63 and 177-week cycles. Chart 1 shows the match of these seven cycles versus the actual closing weekly prices for Citigroup from 2000-2005. Citigroup’s fortunes started to gradually change in 1980s which roughly matches the rise of Pinochet’s fortunes in Chile. Chart 2 shows the seventh cycle of the seventh cycle (which is the largest cycle of 177 weeks). This cycle is also found in Big Oil (see Part XVII, Big Exxon). The cycle is currently starting to head down which could two possible bear rally attempts in the NYSE in 2006 (doomed to failure) as the major longwave weekly cycles are headed down with the dollar (no real bull market but the hype should be good). Chart 3 shows the predicted waveform for Citigroup predicted thru 2006. We think Citigroup is currently entering a downtrend and does not represent a long-term play until after Aug 2006. The downtrend from Nov 2005 thru Aug 2006 is appearing in many equities and indexes. There is a possibility of a short but sharp rise in August-Sept 2005 but this is risky in light of predicted coming market weakness in Oct 2005+. The “Last Word”: There are some that fear that this time is different: “Chuck Prince, Chief Executive of Citigroup, said: [“The possibility of a liquidity bubble around the world concerns me. A very cautionary thing is that it feels like the world is changing and traditional indices may not give a complete picture.”] Indeed, the world is changing – and Citigroup will there in the middle of the coming change in Asia when hundreds of millions come calling for their credit cards from 2008-2013! “Let’s meet those numbers, people”. Hey do you see any liquidity bubble? Congress does not see any liquidity bubble – just keep those presses rolling! Need cash instantly, no credit with world banks, no problem – just contact 1-800-Seti Cash and Bust-A-Bubble. The peak of the seventh cycle of the seventh cycle (which is 177-week period) will occur on 11.11.11. What a Magnificent Seven! Perhaps, Citigroup has a date with Destiny, Mr. Prince.
DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, the author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments. ©
2005 Dr. Stephen Rinehart CONTACT
INFORMATION |
The
Magnificent Seven is a chronicle about the adventures of
Longwave Cycles who rode onto the “western scene” many
decades ago (would that be in 1913?). In this episode, we look
at a major component of the DJIA for banking sector – big
Citigroup. Citigroup became a financial (credit
card/underwriting) powerhouse in 1998 when Citicorp merged with
Travelers (it was an $83 billion deal done in six weeks over a
couple of Sarsaparillas at the Greenbriar) and is an interesting
story of New/Old York money and interlocking corporate
boards/conflicts. In the 1980s, Citibank appeared to be on life
support with the Fed but the “Phoenix” conveniently rose out
of the ashes when the Saudis became investors. The largest
investor is said to be Saudi Prince al Waleed with 4% to 5%
holdings from the 1990s.
