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All of the Big Four banks opened solidly in the green today, but less than two hours into trading, they're all currently trading lower than where they started. JPMorgan Chase (NYSE: JPM ) even bumped temporarily into the red.
Citigroup (NYSE: C ) is a prime example of this sudden downward trend: up by only 0.55%, after opening up 0.91%. Why the abrupt onset of gloominess? Revised economic data from the Department of Commerce might be the answer.
A revision too far
The news is fairly grim: The federal government has revised the country's first-quarter GDP growth from 2.4% to 1.8%. Revisions are typically within a few points either way. A downward revision of 0.6% is an unusually sizable drop.
This after a two-day market rally that had the markings of a potential recovery from last week's news that the Federal Reserve might begin dialing back quantitative easing later this year, and fears of a credit crunch in the world's other economic superpower, China.
Foolish bottom line
Still, it's looking like the market rally just might hold on by the skin of its teeth. Investors around the world have now had a week to digest the Fed's news. After two days of general freaking out, and a weekend to put Ben Bernanke's statement into perspective, the markets may now be correcting what was an obvious overreaction.
Dialing back quantitative easing is only ever going to happen if good economic news continues to come in, and by what we're seeing today, that may not necessarily be the case. In fact, strangely, today's grim news from the Commerce Department could eventually end up buoying markets, once investors realize that bad news like this could keep QE going strong. This is the weird world of economics we're currently in.
But Warren Buffett says that when others are being fearful, be greedy. With the kind of fear that's coursing through the market right now, this is an optimum time to be greedy.
Citi has come a thousand miles since its financial-crisis days. The balance sheet is stronger than ever, leadership -- in the form of CEO and banker's banker Michael Corbat -- is stronger than ever, and the bank is thinking ahead and moving forward: Witness Citi's bold move into Iraq, a country the bank's analysts see as a potential $2.0 trillion-dollar economy in the decades ahead. Investors in Citi know they're onto a good thing. Time to be greedy and scoop up some Citi stock while markets are still figuring out which way to go.
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