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Monday, May 10, 2010

Market Thought... :)

This ride has everything, from fear-to-fun in less than a week.

I think a major uncertainty is off the table for a few years. I am also a believer in countries changing their ways, since the IMF has history of shifting country policy and witnessing American state and local municipalities reduce spending. Longer-term I believe we are setting up to be on the right side of the track.

The bullish thesis appears to be the name of the game (at least this week :). However, I need a few days of trading to pass to get a handle on what the new market dynamic will be. There was simply too much chaos, within a very short period of time, to understand the dynamic going forward with any sense of confidence.

The one interesting piece of information I heard about reviewing my media sources was that European banks are under-capitalized, which will hinder their ability to lend. I think this scenario is very bullish for Citi. With its large exposure abroad, and their well capitalized structure, they maybe in the best position to capture market share. With Citi's current price, despite the market move, I really like the name. (But continue to believe in the trading thesis.)

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