RIght after Citi’s preferred-for-common exchange I announced that I was selling (I sold most of my position at just under $4 and the rest at $4.75). Citigroup was a sick-puppy-in-a-poke. I knew what evil lurked in its back book; Asteri Capital, the hedge fund for whom I was portfolio strategist until July 2008, had manufactured it. Supposedly AAA bonds backed by CCC credit created in leveraged buyout were an Asteri innovation, and Citi bought them (and subprime and commercial mortgage and other debt) at stupid prices.

If you want to own Citi, wait. You’ll get them cheaper. It has more exposure to consumer credit card debt than any of its peers and will continue to waste away for several quarters.

This entry was posted on Tuesday, November 3rd, 2009 at 7:41 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.