Friday, April 18, 2008

Explain this:

Some headlines this morning:
Citigroup stumbles again
CNN Money - 46 minutes ago
Citigroup delivered another devastating quarterly loss Friday, this time losing more than $5 billion due to troubling results in its fixed-income business and higher consumer credit costs.

Citigroup results send stock futures higher
Reuters via Yahoo! News - 32 minutes ago
Index futures were firmly higher on Friday after shares of Citigroup Inc rose before the opening bell following the release of its quarterly results.
And it can't be because the loss was "better" than anticipated. IHT:
The loss totalled $5.11 billion, or $1.02 per share, and compared with a year-earlier profit of $5.01 billion, or $1.01 per share. Revenue fell 48 percent to $13.22 billion.

Analysts on average expected a loss of 96 cents per share on revenue of $14.35 billion, according to Reuters Estimates.

Despite the loss, Citigroup shares rose $1.43, or 6 percent, to $25.46 in premarket trading.
Up 6% on "worse than expected" (bigger loss, smaller revenue).


Because Citigroup is unquestionably "too big to fail," and therefore the Federal Reserve will shortly hand it a huge pile of money, is my guess.

By Anonymous Anonymous, at 4/18/2008 6:19 AM  

The market is completely irrational.

By Anonymous Rockie the Dog, at 4/19/2008 7:53 AM  

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