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Signs Of The Time: Seller Exhaustion

The markets are showing some signs of seller exhaustion.

Futures are stronger as bank stocks are trading up for a second day. Vikram Pandit, Tim Geithner and Sheila Bair are all out talking about the banking crisis.

The main topic of discussion is Citigroup CEO Vikram Pandit's letter to employees about how "disappointed" he is with the current stock price.

When your stock goes from $20 to $1 in five months, I would find a word other than "disappointed" to describe my feelings.

Regardless. The key takeaway is that Pandit says they are profitable through the first two months of 2009 and are having their best quarter-to-date performance since the third quarter of 2007.

This follows on the heels of Wells Fargo comment on Friday that they too were seeing strong operating results for the first two months of 2009.

There has been some good news for Citi recently. The recently announced preferred conversion to common equity has improved capital ratios. The Smith Barney sale which should happen in the middle of the year will also help. Other asset sales should occur this year, like Nikko Cordial, but no deal has been announced.

Citi trading up 20 percent, JP Morgan 10 percent, B of A 14 percent.

Symbol
Price
 
Change
%Change
NOVU
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SC0Y
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WFC
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European banks are trading up double digits after lagging their American counterparts yesterday.

Elsewhere:

1) Sheila Bair gave an interview to the Washington Post, stressing the need to get troubled assets off the books of banks by recording losses. While painful, she insisted this was the only way to effectively deal with the problem. She said the government can provide low-cost financing to buyers of the assets.

Treasury Secretary Tim Geithner met with lawmakers last night to discuss the new programs he will be announcing in the next week or so.

2) The dollar is down, commodity stocks are trading up like Rio Tinto, ArcelorMittal and BHP Billiton are trading up in the high single digits.

Symbol
Price
 
Change
%Change
OGT
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MT
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3) United Technologies cutting 11,600 jobs and reducing earnings guidance in association with an additional restructuring charge of $600 million for the year, to $750 million in total restructuring costs for the year.

They noted that the economic recovery previously anticipated in the second half of 2009 "now appears unlikely."

Trading up 3 percent pre-open.

    • Bernanke Says Regulatory Overhaul Needed

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