The Independent reports that Citigroup's (NYSE: C) Smith Barney took the $100,000 entrusted to it by a 76-year old mother and put it in now-illiquid Auction Rate Securities (ARS) -- bonds whose interest rates are supposed to reset in weekly auctions -- without her understanding. After she died earlier this year, her son discovered that what she had told him was "in an easy-to-sell money market fund" was in fact frozen in ARSs.

Since February, when I first posted on the $330 billion ARS market, a forum has gathered with 3,924 comments from people who have much of their savings frozen. This widow, like many of the people who comment there, had their money moved into ARSs without their knowledge or with the assurance that the money would be safe and would offer a higher than average return. One key question: Did ARS purchasers receive prospectuses or know of their risks?

But last year, an accounting rule change caused demand for ARSs to evaporate since companies could no longer account for them on their balance sheets as "cash equivalents." So the banks started to bid on the auctions themselves to keep the market going. But thanks to the credit crunch, banks no longer had sufficient capital to prop up the market. So the auctions failed and thousands of people, like this widow, have found that they can't get their money.

Continue reading Smith Barney reportedly wipes out 76-year old mother's $100,000

Smith Barney reportedly wipes out 76-year old mother's $100,000 originally appeared on BloggingStocks on Tue, 20 May 2008 09:07:00 EST. Please see our terms for use of feeds.

AIG (NYSE: AIG) is a sinking ship, at least as far as the stock market is concerned. It posted a loss of close to $8 billion last quarter and said it would have to raise over $12 billion. Not a healthy picture for one of the world's largest insurance companies.

Now, one of AIG's key divisions would like to go out on its own. According to The Wall Street Journal, "Officials at powerhouse International Lease Finance Corp. have grown increasingly concerned that the company will be weakened by its parent's financial woes." ILFC, as the company is known, is the largest aircraft leasing company in the world. If AIG has a drop in its credit rating, ILFC will find it more difficult, and more expensive, to raise money.

The ILFC raises, once again, the issue of whether financial services firms put together over the last two decades benefit shareholders at all. What does the aircraft leasing business have to do with insurance? Across town in NY, the board at Citigroup (NYSE: C) is probably asking what relationship Smith Barney has to the bank's international consumer service business.

The more quarterly results that come out from financial giants the clearer it is that some very good operations are trapped inside troubled parents. Why wouldn't shareholders want a piece of the action by having these businesses spun out? The answer is they do want a piece of the success, and there is no reason they should not get it.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

One part of AIG wants to split from parent originally appeared on BloggingStocks on Mon, 12 May 2008 08:27:00 EST. Please see our terms for use of feeds.

Research in Motion (NASDAQ: RIMM) closed at $104.30 Thursday.

RIMM will report Q3 EPS on December 20, 2007. Smith Barney says: "RIMM continues to be our top North American handset pick." International CES will be held January 7-10 in Las Vegas. RIMM December 103 straddle is priced at $12.35. RIMM January option implied volatility of 78 is above its 26-week average of 53 according to Track Data, suggesting larger risk.

Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Options update 12-14-07: RIMM option prices aggressive into EPS originally appeared on BloggingStocks on Fri, 14 Dec 2007 10:22:00 EST. Please see our terms for use of feeds.

Honeywell (NYSE: HON) is hosting its 2008 guidance announcement on December 13. Alex Brown says, "We expect a bullish outlook from HON." HON overall option implied volatility of 28 is near its 26-week average of 27 according to Track Data, suggesting non-directional risk.

United Technologies (NYSE: UTX) is hosting its 2008 outlook meeting on Thursday, December 13. Smith Barney says, "Buy UTX; Sell BA - Use any strength in BA's stock to switch to UTX." UTX overall option implied volatility of 24 is near its 26-week average according to Track Data, suggesting non-directional risk.

Daily Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Option update 12-10-07: Honeywell, United Tech volatility flat into outlook originally appeared on BloggingStocks on Mon, 10 Dec 2007 10:06:00 EST. Please see our terms for use of feeds.

Dell (NASDAQ: DELL) is expected to announce Q3 EPS of 35c on November 29 according to Thomson First Call.

Smith Barney says: "Reiterate Buy - we continue to believe that CY08 consensus EPS underestimates that positive impact of retail expansion, headcount reductions and share repurchase."

DELL December option implied volatility of 45 is above its 26-week average of 28 according to Track Data, indicating larger price fluctuations.

Daily Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Option update: Dell volatility elevated into earnings originally appeared on BloggingStocks on Wed, 28 Nov 2007 10:26:00 EST. Please see our terms for use of feeds.

Citigroup Inc. (NYSE: C) volatility at nine-year highs on chatter of potential spin-offs:

Investor unhappiness with Citigroup's recent sell off has resulted in a larger chorus for Citigroup to consider spin-off options. Citigroup's Smith Barney unit has been frequently mentioned as a potential spin-off. Telegraph.co.uk said "banks including JPMorgan Chase & Co. (NYSE: JPM), HSBC Holdings plc (ADR) (NYSE: HBC), and Morgan Stanley (NYSE: MS) are being touted as possible buyers if Citigroup's management decides to offload assets." Citigroup was recently up 15 cents to $33.03. Citigroup call option volume of 135,047 contracts compares to put volume of 101,613 contracts. Citigroup November 32.5 straddle is priced at $2.55. Citigroup December option implied volatility of 56 is above its 26-week average of 29 according to Track Data, suggesting larger price risks.

International Business Machines Corp (NYSE: IBM) volatility elevated after Sharp two-day sell off after Cisco Systems, Inc. (NASDAQ: CSCO) outlook:

IBM was recently down $4.83 to $101.27. IBM call option volume of 20,665 contracts compared to put volume of 25,200 contracts. IBM November 100 straddle was priced at $4.90. IBM December option implied volatility of 33 was above its 26-week average of 24 according to Track Data, suggesting larger price risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Option update 11-9-07: Citigroup and IBM Volatility Up on sell off originally appeared on BloggingStocks on Fri, 09 Nov 2007 16:24:00 EST. Please see our terms for use of feeds.

BEA Systems

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Option update: BEAS options suggest buyout deal in early 2008 originally appeared on BloggingStocks on Mon, 29 Oct 2007 13:04:00 EST. Please see our terms for use of feeds.

AIG (NYSE: AIG) is recently down $0.56 to $63.28. Smith Barney says, "AIG has yet to provide investors with an earnings release date for 3Q '07 results. In the wake of the subprime meltdown, investors are eager to asses the fate of AIG's $29 billion of subprime mortgage exposure and its credit guaranty business." AIG call option volume of 13,468 contracts compares to put volume of 36,042 contracts. AIG November option implied volatility of 44 is above a level of 33 from last night and above its 26-week average of 22 according to Track Data, suggest larger near term risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Option update 10-25-07: AIG puts up on subprime concern originally appeared on BloggingStocks on Thu, 25 Oct 2007 13:27:00 EST. Please see our terms for use of feeds.

National City (NYSE: NCC) volatility Elevated; NCC sells off on EPS & loan exposure. NCC reported 3rd quarter 2007 net income of $106 million, or 18 cents per diluted share. Goldman Sachs says "turning NCC around is going to take time. Mortgage contributions are likely to remain depressed, while credit will remain an issue." NCC has a current dividend yield of 7.34%. NCC November option implied volatility of 45 is above its 26-week average of 31 according to Track Data, suggesting larger price fluctuations.

Fifth Third Bancorp (NASDAQ: FITB) volatility Elevated as FITB near 10-year low. FITB, headquartered in Cincinnati, is recently down $0.99 to $28.99. Smith Barney says "while FITB was going through its regulatory issues, it tried to offset by taking on more rate risk. One of our concerns has been that it was also taking more credit risk." FITB November option implied volatility of 38 is above its 26-week average of 27 according to Track Data, suggesting larger price risks.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Option update 10-24-07: National City, Fifth Third Bancorp volatility up originally appeared on BloggingStocks on Wed, 24 Oct 2007 12:57:00 EST. Please see our terms for use of feeds.

Research in Motion (NASDAQ: RIMM) closed at a record high of $124.52.

• RIMM and Alcatel-Lucent (NYSE: ALU) announced an agreement to distribute BlackBerry handsets in China.
  
• Smith Barney says: "We continue to believe RIMM's stock price appreciation is fundamental. We reiterate our Buy rating on RIMM."
  
• RIMM November option implied volatility of 59 is above its 26-week average of 48 according to Track Data, suggesting larger risk.

Countrywide Financial (NYSE: CFC), a U.S. home mortgage lender, closed at $15.05.

• CFC is expected to report EPS on 10/26.
  
• CFC November option implied volatility of 103 is above its 26-week average of 61 according to Track Data, suggesting larger risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Option update 10-24-07: RIMM shares at record high; CFC at 4-year low originally appeared on BloggingStocks on Wed, 24 Oct 2007 09:19:00 EST. Please see our terms for use of feeds.

Office Depot, Inc. (NYSE: ODP) had 1,186 retail stores in North America and another 369 stores owned, licensed or franchised in other parts of the world as of June 30th.

Smith Barney says "shares of ODP appear undervalued but few data points loom in the next quarter or two to drive them higher." ODP is expected to report earnings per share (EPS) in late October. ODP January option implied volatility of 43 is above its 26-week average of 33 according to Track Data, suggesting larger price fluctuations.

Baker Hughes Incorporated (NYSE: BHI) is engaged in the oilfield service sector. BHI recently up $1.01 to $92.12.

BHI has a market cap of $29.5 billion with long term debt of $1 billion. BHI is expected to report EPS on October 26th. BHI reported on October 8th its September rig count rose to 1,032 from 1,009 in August 2007. BHI November 95 calls have traded 59 times on contract volume 2,878 contracts, above its open interest of 834 contracts. BHI November 100 calls have traded 170 times on contract volume 18,641 contracts above its open interest of 480 contracts. BHI November option implied volatility of 34 is near its 26-week average of 30 according to Track Data, suggesting slightly larger risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Option update 10-9-07: Office Depot volatility Up; Baker Hughes calls active originally appeared on BloggingStocks on Tue, 09 Oct 2007 16:39:00 EST. Please see our terms for use of feeds.

Google Inc. (NASDAQ: GOOG) recently trading up $15.29 to $609.20.

GOOG is expected to report earnings per share (EPS) on October 18th. GOOG October at the money 580 straddle is priced at $32.10. GOOG October option implied volatility of 38 is above its 26-week average of 27 according to Track Data, suggesting larger risk.

The Gap Inc. (NYSE: GPS) CEO Glenn Murphy hosted a meeting with analysts on October 5th.

Smith Barney says "Mr. Murphy is focused on making the company gets an adequate return on its investments. This includes a focus on the expense of the business. We suspect there will be continued focus on moderating the cost structure and assessing various cost components, including marketing. We think the real estate portfolio is under review." GPS over all option implied volatility of 31 is near its 26-week average according to Track Data, suggesting flat price risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Option update: GOOG straddle suggests risk into earnings per share as GOOG at record originally appeared on BloggingStocks on Mon, 08 Oct 2007 16:15:00 EST. Please see our terms for use of feeds.

Research in Motion (NASDAQ: RIMM) is recently up $9.14 to $109.64.

• Morgan Keegan says: "Trends still very strong; raising fiscal 2009E EPS to $2.98."
  
• RIMM is expected to report EPS after the close tonight.
  
• RIMM total option volume is heavy on 191,243 contracts trading. RIMM October option implied volatility of 49 is below a level of 87 from last night prior to EPS. RIMM average option implied volatility over the last 26-weeks is 44 according to Track Data.

SanDisk (NASDAQ: SNDK) a supplier of flash data storage card products, is recently down $0.76 to $52.43.

• SNDK is expected to report EPS on 10/18.
  
• Smith Barney-SBSH has a $71 price target on SNDK. SBSH said on 10/4 "contract pricing a negative, new products a partial offset."
  
• SNDK October option implied volatility is at 64, November is at 52, above its 26-week average of 44 according to Track Data, suggesting larger near term price risks.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Option update: Research in Motion (RIMM) volatility collapses as shares rally originally appeared on BloggingStocks on Fri, 05 Oct 2007 12:50:00 EST. Please see our terms for use of feeds.

Baidu (NASDAQ: BIDU) volatility flat on reports of BIDU TV.

www.Baidu.com, a Chinese language internet search provider, closed at $203.21. SBSH has a $250 price target on BIDU. Smith Barney says that "according to article on www.Tech163.com and it www.sohu.com, BIDU has started to test its BIDU TV advertising display on its union sites on 8/21." BIDU September option implied volatility of 50 is near its 26-week average according to Track Data, suggesting non-directional risks.

SINA Corp (NASDAQ: SINA) option implied volatility flat at 42.

www.SINA.com, a leading online media company and value added information service provider for Chinese communities, closed at $40.30. CIBC World said on 8/7 "SINA maintains a solid market leadership position in branded advertising, supported by stable traffic growth and solid relationships with larger advertisers." SINA overall option implied volatility of 42 is above its 26-week average of 39 according to Track Data, suggesting non-directional risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Option update: Baidu (BIDU) volatility flat on reports of BIDU TV originally appeared on BloggingStocks on Fri, 24 Aug 2007 09:55:00 EST. Please see our terms for use of feeds.

Newell Rubbermaid upgraded across the board originally appeared on BloggingStocks on Thu, 15 Feb 2007 12:54:00 EST. Please see our terms for use of feeds.