Free Money

Folks,

The best trade I made all this year involves CFC. A few months ago they announced a $2B loan from BAC--the stock popped almost 15% the next day...and I shorted the hell out of it and quadrupled my money. That day the stock actually finished down around 10%. It was a gimme. An opportunity..... why? No one borrows money from people at a ridiculous interest rate unless they are in trouble, big trouble.

Fast forward--tonight--Citigroup announced they borrowed $7.5B from Middle East investors--no big deal, except the rate was at 11%!!!!!!! This is not good for one of America's largest banks. Citigroup knows banking, and money, and um, loans....no one borrows at 11% if they can go elsewhere to get the money for less. Uh-oh.



http://www.reuters.com/article/marketsNews/idINSP7190720071127?rpc=44

History repeats itself. Don't believe me--look at the end of the day chart for C. It popped huge..someone leaked the news. The official news came later tonight. (Dow futures went up as well).



Tomorrow morning expect a huge pop in C. Short the hell out of it....buy puts....do something, but don't get caught in the mindset that this is a deal on the long side. If you want to be safe, buy your puts out a month or two. If you are crazy, but OTM Puts for December. Going long is suicidal though....unless you plan to hold until either A) Citicorp is split or B) plan to sell 5 years from now.



Worst case, the stock does nothing or takes a few days to slide. Either way you win.

I didn't get any $50 bills from anyone in the mail for the Goldman short--which was sorta fair, because my reasons were off, but the effect was the same. You could have made a fortune with that chart that week. Anyhow, send me 25 $2 bills if you profit off this Rocketstocks tip (Euros would be better at this point)

(For the record, I own puts in C already)











-Rocketshoe