glassbox

Citigroup: The End Draws Near

Citi is certainly very big. The sad thing is that it currently does not have a good top management that is able to manage this behemoth well, and its taking its toll on its employees and its clients. Stock price these days is quite a separate thing. Meanwhile, I will buy it only I see some real leadership at the top,

Wall Street, R.I.P. Now What?

Boomerang theory - what goes around, comes around. So much for the smarties on Wall Street. You can never beat Mr Market! Nothing beats honest hard work.

Who's Buying Financials?

Banking 101 - the multiplier effect. $1 given to the bank allows the bank to lend up to $10. The point on banks is not so much the leverage but how they balance their maturity and liquidity gaps. As long as banks are able to refinance their fundings, they will continue to remain solvent - even if their leverage is high.

Mother of All Short Squeezes?

you know why there is such a big resistance to short selling especially on sites like SA and coming from many fund managers, esp hedge fund managers.... Because if rationality and logic has its way, running a hedge fund is going to less profitable, market makers will no longer be able to make as much markets and brokers cannot earn twice on their margin business (first from lending you money and then lending your shares).

How High Leverage Has Brought Down the Whole Banking Industry

The whole financial sector is going to get another huge leverage boost again if nothing is done to regulate short selling (or ban it). Short selling is another form of leverage - instead of borrowing money, you borrow shares. The difference is that you can probably multiply money easily but you certainly cannot multiply shares.