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After losing 9% on yesterday´s trading day, Citigroup upgraded Lehman Brothers Holdings from hold to buy due that is has a “very attractive share price”.

Lehman, the forth biggest US security firm, had a profitable recent quarter and according to Citigroup, it has a protected liquidity position because the Fed and US Treasury is ready to inject cash if Lehman´s share has a further decline.

Last week, Bear Stearns was bailed out by the Fed under similar circunstances and mainly because of the rumors that they didn´t have the capital to support the credit market contraction.

The reaction for this upgrade is happening as we speak; Lehman rose in the pre-market already 5% to 40,60 (5%), and if this news generates a rally, it could easily go another 5-10% higher next week.

US stocks are opening higher because of this, and possibly all financials will take advantage and raise at the beginning of today´s trading day. For optimists, UYG, the ultra financial index that replicates double of the Dow Jones Financial Index, can be a nice buy for the first week of April.

Nevertheless, week consumer spending last month and J.C. Penney´s lower earnings today should eventualy compensate Lehman´s upgrade. I continue to believe that in the long run, financials will lose 10% more, so if you are a long term investor, UYG shouldn´t be an option on 2008.

J.C. Penney is already 14% down in the pre market, and my opinion is that Lemhan´s upgrade is market manipulation and shouldn´t be seen us afinancial recuperation sign.

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