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LOOK REPORT #21: CitiGroup Background: This Quick Look Report is an update to Magnificent Seven Part 18 (see FSU Archives) on 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/political parties. 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 Saudi Prince al Waleed with 4% to 5% holdings from the 1990s. So does that mean CitiBank has Big Oil at heart? 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 could have been better or was covered by (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 the side of old Stagecoaches), 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 rides on big money wheels greased by lobbyists. Chart 1 shows the comparison of the prediction made in April 2005 of CItiGroup’s Weekly closing prices thru March 2006 versus actual weekly closing prices. The predicted waveform is shifted uniformly about $3.00 below the Citibank closing prices. Chart 2 shows the weekly closing prices of CitiGroup estimated for 2006. It shows a relative bottom in mid-summer followed by possible small rally – somewhat boring volatility compared to junior silver explorers. Chart 3 is a WAG (Wild Ass Guess) at the closing weekly prices of CitiGroup for 2007-2008. It shows the possibility of a multi-year high may be coming in Jan 2008 after a sideways/uptrending trading pattern in 2007. Place this chart on the back burner (together with the burned double fudge brownies) until we see what’s happening with a possible worldwide recession by late-2007. This chart could be an early indicator of a coming multi-year top in financial markets in 2008 with another one in 2012. Chart 4 depicts one of the largest weekly cycles in CitiGroup’s stock prices and it has been growing in amplitude over the past five cycles. It is currently heading down. Chart 5 shows one possibility for future tops in the 187-week cycle (which varies between 170-weeks and 200-weeks). The peak of the seventh cycle of the seventh cycle (which is 187-week period) will occur on/about 11.11.11. What a Magnificent Seven! Perhaps, CitiGroup has a date with Destiny, Mr. Bernanke (beware of the Seventh Cycle of a Seventh Cycle). Summary: By early 2017, the word “bank” may become another four-letter word in somebody’s lexicon. Can you say Asta Lavista, Baby! Are US banking stocks fun or what – so much paper and so little time.
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INFORMATION 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. |
