Jim Cramer: Citigroup may be the metaphor of the moment

Citi may be the metaphor of this moment where we really are too worried about business, as there is no doubt that there is much concern about a slower international economy.

Get a load of what CEO Michael Corbat said at the conference call: "We obviously see a connection between what we see in our business and what the markets say." He continues to say that he sees no significant decline, and that "we see the greatest risk in the world economy is one of talking to us in the next recession as opposed to the underlying founders who take us there."

So, what does it mean? What does this comment and this revenue report say about the market and where we are headed?

First, I think we've been through a big bear market, one that made us ignorant of something good and done something negative in the mind because it's hard to believe we could get shares plummeted like this if the real world wasn't with rolling over. Citi is a classic example. The holdings of this dominant international bank went from $ 70 before Jay Powell declared war on the economy to save it to $ 48 in less than four months. It's called a bear market and don't let anyone tell you anything else. Every time you take that kind of shellac, it says, it's going to be a real downturn as well as an increase in bad loans.

But when we read through Citi's numbers, the only real negative was the volume of trade, which, while lucrative and down 21[ads1]% year-over-year, to give the quarter the appearance of weakness – it has nothing to do with the real economy, which was quite robust for the bank without any spike in bad loans whatsoever.

There is fear of fearing to speak.

More importantly, we have a completely different pattern that is evolving here than in recent times the banks reported. I have become accustomed to the banks' shares that are being hammered after they have reported because they have repeatedly entered the quarter.

But because the banks reflect people who talk into the next downturn, we do not have that kind of startup. Instead, we have a situation where a company that has just made $ 4.2 billion in the fourth quarter and is trading well below the tangible book of $ 63.79 – the stock is $ 58 – bought back 74 million shares. If you sold Citigroup in the decline, the odds would favor some percent of the sale being bought by Corbat, which intends to buy back 8% of the company's shares in 2019.

It's getting better, it's actually speeding the company as well as An annuity stream called "Treasury and Trade Solutions" which in itself is likely to be worth at least half the value of the bank's stock because it is gigantic and rapidly growing at low risk. Think of it as a global cash management business for multinational companies doing everything from payroll, currency conversion, supply chain, and financial trading loans. Remember, Citi, due to its worldwide heritage, has a presence in 100 countries. Consider a fine-text business like a Square (SQ) or a MasterCard (MA) or a PayPal (PYPL) that is valued at gigantic price-to-earnings multiples against 8 times in this year's revenue that Citigroup is trading.

No wonder that the committed shareholder ValueAct has taken a big position and has a constructive dialogue with Citi; There are hidden assets probably worth so much more alone than in the bank, even though no one is talking about breaking up the company.

Do you know what else I like? Citigroup is very big in Asia-Pacific securities, second in fixed rate, second in mergers and acquisitions, ex-Japan and number three in equities. Why does this mean so much? Because of the elephant in the room, Goldman Sachs (GS). Now my charitable trust has both shares because they are so darned cheap and I don't think we are heading into a recession but one of the main reasons why Goldman's stock is down so much is the risk of his reputation from his scandal with Some Bond offers that Goldman placed that seem to be false. Goldman is number five in interest, number one in M&A, ex-Japan and number two in shares. If you really believe that Goldman will be hurt in Asia because of the scandal – and I don't know if it's true, but many on the streets seem to believe it is – Citi is the big winner.

Is there a greater takeaway for stock markets beyond Citigroup? First, the finances represent about 20% of the market, so if they can take fire that is good news for the overall wallpaper. There are many high quality regional banks such as KeyCorp (KEY) or Huntington Bank (HBAN) that have been unintentionally high returns, giving you a dividend of over 4%. That, alone, tells me, like Citigroup, their shares are buying. These regional banks are incredibly cheap, but because bank directors fear the government will come down on them if they try to combine, there is no real way to get immediate value. Heck, if you want a profitable trade, you should theoretically buy Goldman Sachs and hope it merges with Citigroup to become a sales, trading and fintech power plant.

Then again, it's a dream, so don't buy it because of musings.

Secondly, we must accept the fact that if you own a stock that has been crushed by the bear and it gives good news, it will be rewarded, which has not really been the case since one year ago.

Now it was not the best of the day to analyze this phenomenon when we got a few downgrades of tech shares, especially semiconductors, which were strictly about stocks that have come up too hard, too fast based on nothing. But you can interpret it as good news too, because unless you bought them on Thursday or Friday, you don't sweat it. Apple's (AAPL) stock was rocked again on the same old news; It gets a bit tiring, not unlike Facebook (FB), with a stock that seems to break out of the skyscraper after everyone rescued the journalists writing for the penny savers thrown on your driveway. Who knows how much Apple actually comes down when it reports it's like Citigroup. Oh and then it is Amazon (AMZN) left on the divorce of the century. If they could unite you would have a short press of dramatic proportions. But there is no business except those who insist on selling it based on violations.

We were also reminded of how risky shares can be. Sure we won't talk ourselves into a recession but the violent nature of owning a one-time security tool, PG & E (PCG), with 12 million customers, with a share literally cut in half over bankruptcy, a reminder that you have to factor in weakness more, especially given that so many investment companies were recommending stock of this besieged tool fell off the camp fire they were not prepared for. As for the ETF effect, each makes a one-for-one and all-in-one experience, lets you buy ConEd (ED) or one (AEP) for less than it trades Monday.

Nevertheless, most businesses are not in the process of meeting grandiose debt from California fires. It is enough that they have fear themselves going against them, and this is where the opportunity may be.