tedstr

Citigroup Is Too Important to Fail, Which Is Why It's a Great Long Term Investment

Citi preferreds is the way to play it. 11%-12% while you wait for things to improve. 11% is just fine with me for the next 10 years.

Do You Believe Borrowing Leads to Prosperity? (Part 2)

I mostly agree but one fine point. I lease a Mercedes. About $50,000. Nicest car I ever owned or anyone in my family ever owned. My father would think me a fool for leasing this car if he were still around.

But I like it a lot. I have leased several less expense cars over the past 7-8 years. I only lease the ones that have special factory deals. The terms on these cars are great and the car companies have been taking it in the shorts on the residual values and the finance rates to move some of these slow selling cars. Meanwhile I keep the $4-$8,000 in deposit money I would have spent and leave it in a fund making money.

In December the lease was up on the Mercedes and they offered finacing to buy the car at market rates and for a price that was below book value. No cash. So I financed in for the next five years. I will be driving this car for 7.5 years and at the rate it is going, it may still look like and behave like new when I finally own it at my age then of 60.

My point is, you are right, paying cash and paying off your car is smart way to go, but it is not neccesarily a clear choice.

Quality of life matters. There are deals out there. Don't get over your head but buy smart and use some limited debt within your means to maximize your return on a life lived well.

Betting on the Big Banks

How tough is this to figure out. 20 years of increasing consumer debt with late stage shenanigans added in to give the bubble one last peak. Boom. It's over. GE Capital is the poster child

Debt was all the rage. Now not so much. Won't be like that again in our lifetimes. Sure most of them will get back to a decent business, but the non-banks and the credit cards will go back to being a shell of their former selves and GE will go back to mostly making locomotives or look for some other story they can sell like smart grid.

Probly ride them back up 100-200% from their bottoms(already done), but if anyone thinks they are going back 5-10x to their tops, good luck.

Nothing to see here folks, move along.

Why I'm Holding On to Citigroup Stock

No one mentioned that 5% of Citibank is owned by Saudi Prince Alwaleed bin Talal who is $8 Bil underwater on this deal. Don't you think he want's his money back? At least some of it? Do you think Barrack Hussein Obama wants to nationalize the Saudis? I think not.

A Smarter Citigroup Play: Preferred Shares ETF

I am into CPRF, the cumulative preferreds, at three points averaging about $13 for about $60k. A pretty big bet for me though overall a small piece of my portfolio. Yes I am a retail investor.

But my logic was that A) the conversion of the non-cumulative preferreds was designed to lower some borrowing costs for C, but mostly fix the reserve ratios. B) not likley they will seek to convert these since why would anyone want to give these up since the dividends are guaranteed though they could be suspended. C) If C is looking to lower interest costs they could suspend the dividend on these, but the liability doesn't go away, so it might imporve a cash position but would not help accrual earnings.
D) C earnings are not bad if you take out all the losses for mark to market which is about to happen.
E) I'm making 11% for a really long time and that might be a really excellent return for many years to come. If these things go back to $20-$25...happy days.

Anyone see a flaw in my logic?

What's Good for Citi - And What's Good for America

OK. So I get that you and Buffet don't like the fact that someone else can get money cheaper than you can. That alone is not a good reason to not save these institutions.

Pay Little Heed to Economic Reports and Move On

better than that...the real story is the end of the Wintel monopoly. Intel chips in Macs and dual operating environments means every PC owner lusting after a beautiful Mac now has no barriers to entry. This is why their laptop business is booming and a wholesale switch to Macs is on. The phones are a sideshow to this phenom.

This is why Gates is retiring, Vista was an attempt to mitigate the damage by emulating an Apple interface, gone horribly wrong, and Balmer is gone nuts over MSN, his only lifeboat. Buy apple, sell MSFT