Keefe, Bruyette & Woods analysts upped their earnings outlook for Citigroup (C) Monday. KBW's forecast for Citigroup's 2010 earnings stands at 27 cents per share; up from an earlier forecast of 7 cents per share. But all the news wasn't good as the brokerage also stated concerns about the bank's recovery.

The brokerage kept its rating on Citigroup at market perform and left the price target at $4.70 per share. Fellow brokerage Oppenheimer seems to agree with KBW, as it maintained its outperform rating on Citigroup and held on to its price target of $4.45 per share.

Earnings season will kick off after the bell on Monday when the first of the Dow Jones companies Alcoa (AA) reports its quarterly results. The Street expects the metal magnate to report earnings of 11 cents per share. But this morning, ahead of the earnings report J.P. Morgan felt it prudent to downgrade Alcoa to neutral from overweight. The broker also removed the company from its focus list and lowered its price target on the stock from $21.50 to $16.50.

JPMorgan wrote in a note it believes that AA "will still struggle to generate attractive returns at our strategist's 2011 aluminum price forecast of 92 cents/pound." J.P. Morgan did state that the business "has taken significant costs out of its business by closing high cost operations and through additional procurement and productivity savings."

Today the market did an about face going from up to down, to way down, with the Dow Jones Industrial Average ($INDU) losing 146 points or 1.1%. It's not the end of the world but cheaper than yesterday when I posted Who says the stock market is too cheap? In any event, making predictions is a fools game, and when asked to make one, J. P. Morgan (1837-1913) responding to a question about what the market will do, was quoted as saying..."It will fluctuate."

The chatter on Wall Street is about housing, sub-prime loans, default rates and rumors about Apple Inc. (NASDAQ: AAPL) reducing expectations (if not actual production) of iPhone sales. Never mind the rumors, never mind the chatter, just be selective and stick to fundamentals. In particular this may not be a time to venture into highly leveraged companies, or speculative stocks. Stick to basics, and the most basic to me is still energy. Two other sectors that should hold up are health-care / pharmaceutical companies and insurance companies.

If there is anything that was cheap and seems to be getting cheaper it is the unloved insurance companies. They have strong cash-flow, low valuations, pay dividends and very important in unpredictable markets -- they have recurring (predictable) revenue from millions of existing policies. I intend to revisit these in the coming days. Words to the wise for now -- reduce your leverage and think long term.

Those of you who are new to BloggingStocks can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well. Disclosure: I do not own any crystal balls and have no current plans of acquiring one.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

Several years ago, I was a manager of a fund that provided bridge loans for companies. It was a pretty good business – but had its risks.

Here's how it worked: Occasionally, companies waiting for some large piece of financing need temporary financing to tie them over. My company provided these temporary loans at juicy interest rate levels and in exchange for some equity and lots of protection.

Well, according to a piece in the NY Times, it looks like bridge financing is making its way into buyout deals too. For example, there will be bridge financing for the massive buyout of TXU Corp. (NYSE: TXU). That is, a variety of banks will provide about $1 billion to the private equity firms KKR and Texas Pacific Group.

This type of financing, however, is not debt, but rather a form of equity called an equity bridge. In other words, if a deal implodes, it could be a big-time problem for the lenders. After all, in the event of a liquidation, the stockholders are last in line (which, in many cases, means getting $0).

Actually, equity bridges are not new. It was very popular during the late 1980s. Yes, that's about when the last buyout boom self-destructed.

As for the TXU equity bridge, the lenders include the following: JPMorgan Chase & Co. (NYSE: JPM), Morgan Stanley (NYSE: MS) and Citigroup Inc. (NYSE: C). Something to watch.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

For 2006, the hedge fund, Amaranth Advisors LLC, was definitely a black eye for the industry -- as well as an indication of the high risks of such investments. That is, back in the summer, the fund imploded as a key trader made a bad bet on the energy market.

Well, according to a report from MarketWatch, it looks like investors may have recovered 55% to 60% of the remaining capital in the fund. Unfortunately, there is still a good amount of illiquid assets that need to be worked-out.

The big beneficiaries from the mess may actually be top Wall Street firms like Goldman Sachs (NYSE:GS) and J.P. Morgan (NYSE:JPM). For example, it looks like J. P. Morgan got a big boost in trading because of its efforts to unwind half the energy portfolio of Amaranth during the fourth quarter.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

The expected Time Warner Telecom (TWTC) secondary offering priced at $17.50 for the full share amount and then some. The secondary offering of common stock was apparently raised from 27.5 million shares up to over 33 million shares; but the offering was for even more than that. THE ACTUAL NUMBER OF SHARES IS 39,660,598, which is more than the higher end and more than the over-allotment shares.

So, not only was it a higher number of shares that the market was willing to absorb, but it was at a good price if you consider that TWTC closed up almost 5% yesterday.

This morning, "TWTC" shares are trading up at $18.15 as of the last print, and it has already traded more than 1 million shares in pre-market activity. You can expect this to be one of the most active stocks on NASDAQ today. Once again, Time Warner Inc. (NYSE: TWX) and its affiliate owners were the sellers, so Time Warner Telecom will receive no dollar proceeds from the offering. They will gain this much more independence from the ex-parent, but not the cash.

This isn't the first time this year that shares have been sold by "TWX," and this may not be the last time. As noted previously, this share sale and the subsequent pricing was actually good for both sides because it allows Time Warner Telecom (TWTC) to become less and less of astep child and it allows Time Warner to go on down the road to focus on and worry about what it needs to focus on.

There are supposed to be at least two telecom investor buyers in this deal that anted up for more than 2 million shares each, although that has yet to be confirmed and it may not ever be confirmed. In secondary offerings there are quite often more suppositions than there are facts, so it may not even be worth trying to figure that detail out.

Deutsche Bank Securities, Lehman Brothers, and J.P. Morgan acted as the underwriters. TWTC traded 3.1 million shares in regular trading yesterday (compared to 1.15 milllion average daily volume), and you can expect quite a lot more volume today as the shorts cover what they needed to cover fom their allocations from hedging and from the natural after-market buying and selling that comes with most secondary offerings.