Pandit and Bulls Move Markets to 3-Month Highs

Party On, Wall Street.

Several high profile earnings releases have moved market averages back near three month highs and near the top of the recent trading range. While scaling out of a few positions is the order of the day, at least for me, a little follow through from here could really press the bears to cover. If the rumors of heavy cash positions at hedge funds like Och-Ziff are on the mark, the dry powder could ignite fireworks to the upside as technical levels are breeched.

And if anyone has a reason to be happy going into the weekend, it is Vikram Pandit. He reminds me more of a cricket player than leatherhead, but is stiff arming Meredith Whitney all the same today.

The bank's Tier 1 capital ratio -- a financial measure regulators use to monitor a bank's ability to withstand loan losses -- rose to 7.7 at the end of the quarter from 7.1 percent at the end of 2007. The minimum for a ``well-capitalized'' rating from U.S. regulators is 6 percent. Citigroup sets its own target at 7.5 percent, partly to assure its AA- rating from Standard & Poor's....He also is taking steps to free up capital by selling assets such as $12 billion of leveraged-buyout loans and announcing a plan to pare U.S. mortgage holdings by $45 billion this year. Bloomberg

Whitney's last shot across his bow came at the end of March, when she inferred that Pandit would have to raise more equity capital, diluting existing holders. And although the stock came tantalizing close to her $16 target, she has likely missed a chance to catch the bottom in financials and turn a bit more constructive.

Dick Bove, take a bow. His "once in a generation" buying opportunity in Citigroup is looking better with every uptick in Citi's stock.



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