CitiGroup upgrades Lehman: Brown Chutzpah

You know you are behind the curve(no more a laughing matter) when you cannot figure out how these hot cats, who cannot figure out their own "book" by a longish shot(Bear Stearns "book" worth of $80/share gets sold at $2 overnight) .. and you wake up to find these fine "analysts" have put it all behind and are back in business as usual valuing others' "books" accurately on Apr 2:

"Citigroup was the best gainer in the Dow and today, Bear Stearns repeated an "out perform" rating."

Obviously there is strong spine in there, but also these guys are devoted to their craft.. reportedly the "out perform" was issued through a blackBerry from the sidewalk outside their newly pawned building.

Before you can recover ,CitiGroup returns the favor..too many of the believers have been "holding" Lehman stock(all the way down) on their "advise" and need relief :

"Lehman rose 5% in pre-open trade as it was upgraded to "buy" from "hold" at Citi, noting an "extremely attractive" entry point, the recent Fed and Treasury actions to boost liquidity and the broker's management."

(Noted:Another sign of our cluelessness: ..how do you now "buy" when you were "hold" all the way down.. there never was any "sell" ?)

..followed up for good measure:Citi reiterates buy rating on Lehman.

Now, Lehman's turn to upgrade..um, UBS ?

By now,details began to wash ashore in India..there were brown pundits involved in most all these utterances. The legions of desis(natives) who'd been toiling deep into nights and models (abstract only) had been having a rough time lately..very rough.
The law of averages were continually and horrifyingly failing every single call of "bottom in place" , "good value" , "cheap below book" and "oversold" call. Just when these cubicle wizards felt the outermost sigma possible this century was not going to be violated and "expertly" issued another "bottomed buy" call.. Gauss failed them again.

Lately, as one (nowbroken) model-analyst tearfully confessed, most of his ilk in the financial space had taken to issuing "buy" and "outperform" ratings randomly on Financials since markets refused to reflect logic and we all know illogic is yet to be modeled. So they were back to law of averages and the increased temple visits for divine signs of market bottoming.

Primary brownBrigade analysts like Prashant Bhatia who'd been building quite a career with 100% credit for 15% calls (that's admirable call hedging Prashant,you wicked fox, you).. and our beforementioned Pratik Gupta who usually was able to extrapolate stock indexes a couple of decades out ( in better times, he is rumored to have precisely projected a (to be est. in year 2015) Lhasa(Tibet) stock index "target" of 12,000 by year 2050)..these achievers in the ruthless global financial centers (where meritocracy rules) have been quietly (Ok not so quietly) edging out the reality challenged Blodgets and Meekers to bring that brown pride to their profession.

Coming back to the curve lagging realisation dawning at Luddic Research, there were additional uncomfortably model busting signs:

• UBS announces $19B in writedowns and shares rise.
  
• Lehman raises finance *it doesn't need* ..shares rise.
• SEC's "better" way to account illiquid assets.. Financials rise.
• A ton of bad news from all conceivable fronts.. markets really rise.

This put us back to the drawing board and here we display the legendary Luddic research analysis, which our clients trust and respect to explain and predict(retrospectively) most all market behavior( we confess this time the model transcended all expectations as the degree of correlation is *absolute* between our model and above market moves):

The model we now use to trade and predict(retro) any market with a >1.0% of brown(Indian subContinent origin) participants is based on (so obvious on hindsight) Brownian motion.

It all fell into place when our researchers dug up references in the ancient Vedas about such movements in Indian grain futures of the time which were dominated by exceedingly brown(outdoor mkts) men.This was way before similar behavior was noticed by Bob&Co in other non living molecules, pollen etc.

The defining characteristic of this "brown" legacy,which carries to present day markets, is these players' severely limited social life/social acceptability which frequently manifests in extreme desire to call bottoms and tops and pray for the best..safe in the knowledge they need to be right only once every few years to be employed and never need to risk own capital (in fact the law actually forbids this) .The sum total of these socially challenged(apart from work related junkets) analysts' varied and ad hoc utterances cause the markets to closely(*exactly*, if I may confide) replicate Brownian movement ,thus assuring the success of our model.

OTH,we are proud that our cubicle dwelling exports(singly insignificant,but as a group formidable) are able to exploit the capitalist folly of yonder lands with little loss to own dignity and capital.. a million brown "analysts" are not far from getting unleashed into this global financial la-la-land.. mark my words.