Comments on: Citi Considers Selling Itself, in Whole or In Parts (And is Barking Up Wrong Tree re Shorts)

By: sanjay

sanjay — Fri, 21 Nov 2008 13:54:00 +0000

perhaps now they will do the right thing. They should have nationalized any bank that was unable to fund itself in the private markets. I think had they done that they would have been able to avoid the rot spreading into the real economy. The Swede’s showed the way to do it and the Japanese the way not to do it. Obviously we couldn’t adopt anything that “old Europe” had done

By: River

River — Fri, 21 Nov 2008 12:56:00 +0000

‘There are apparently rumors circulating that Citi is on the verge of bankruptcy.’

ROFLMAO…

For years we have known about the level 3 ‘assets’. No one dared call it BK!

By: Anonymous

Anonymous — Fri, 21 Nov 2008 11:57:00 +0000

Cash is, perhaps, not the biggest problem here. A criminal lack of honesty, truth, and trustwothiness is. The Federal government has fulfilled it's metamorphosis from investor protectorate to criminal accomplice !

Even as these "institutions" crumble, they are sucking in more investor money, with the gov providing cover. If Bernanke learned anything from his "study" of the GD, the biggest casualty was loss of trust and confidence in the financial system.

We are caught between a rock and a hard place. The new team has no choice but to allow the Fascists to twist in the wind as the truth, the sunshine of free markets, seeps out to the investing public. Want to know what is really going on in the stock or bond markets. Wait until the value of your principle disappears in a tidal wave of front running insider selling, usually a day after the financial cartel has pumped the price up so they can sell at the highest price to the unsuspecting public.

Trusting anything the government, business, or academia says is a leap of faith. These are the first and most enduring casualties and the ones that are killing us. Are there no decent Americans left at the top ?

By: Anonymous

Anonymous — Fri, 21 Nov 2008 11:27:00 +0000

Any one who has read Bronte Capitals article Sheila Bair and seizing Citigroup will be extremely worried about this situation. It is clear that there is a potential here even if a rescue is achieved to topple many other banks by providing a disincentive for investors to invest in bank holding companies.

Will they be rescued today by options expiry or will we see another busy weekend of activity. I am inclined to think no rescue will be forthcoming with profitable parts sold off leaving a husk to collapse at some future point. The government would be in a difficult place having baulked at the protectionist auto bailouts, could it be seen to bail out further another bank. The clock is ticking.

By: russell1200

russell1200 — Fri, 21 Nov 2008 10:16:00 +0000

shadow

In the Summer of 05 going into 2006, I was reading 10Q and other exiting items with regards to many of the fine banking institutions who have since made news (but not citi). I was constantly amazed at how shallow the analysts reports were. It was almost as if they didn't even read the SEC filings.

Somewhere in all the middle of the this I recall Countrywide changing from an accrual to a present value accounting method on their servicing business. But they didn't bench mark it in a way that you could tell what it had done to their numbers for that Q. Nobody said anything.

I wasn't until one or two Qs later that they gave the number, and I think it was buried in the boiler plate warnings section of all places.

And this is in 2005

By: wintermute

wintermute — Fri, 21 Nov 2008 09:48:00 +0000

Agreed Richard, Shadowfax,

Michael Shedlock was pointing out Citi’s 1$Tn of off-balance-sheet dubious “assets” a year or more ago – and how the unknowns in there made a mockery of their Tier 1 capital ratio.

I consider that the fate of Citigroup is the acid test for the whole bailout paradigm. Especially as so many foreign depositors will need to be made whole – a very difficult call when GM/Ford/Chrysler are going to the wall – with huge domestic impact. $25bn going to foreign Citigroup depositors instead of Auto-makers is dynamite politically..

Obama must be thanking his lucky stars that the whole credit crisis started on Bush’s watch!

By: Richard Kline

Richard Kline — Fri, 21 Nov 2008 09:09:00 +0000

Citi has been dead since July 07. D. E. A. D. The continued stall on effecting a resolution to this rotting, flailing zombie has been emblematic of the _failure_ of Paulson and the current Admin to come to any serious terms with the scale of the present crash. We’ve seen 16 months of kick the can down the road on this, but it looks like the dead whale will rupture before 20 Jan. This entire outfit needs to be broken up into many bitty pieces, not consolidated with anything else. The ’sale’ word is the desperate sobbing plea of anyone fool enough to be holding their equity or bonds. Let the capacity reutilization of the financial economy get begin in a big way here.

Oh, and Sheila: Just seize the thing. Seriously.

By: fav.or.it

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By: shadowfax

shadowfax — Fri, 21 Nov 2008 07:51:00 +0000

I interned at an asset management house over the summer, and one of the things they asked me to do was look at Citi’s off-balance sheet assets. The bank had a whopping USD 1.1 trillion in off-balance sheet assets (most of which I had no clue as to what they were). What I found extremely weird was that there were hardly any sell-side research reports that explained the significance of Citi’s off-balance sheet assets (this was in August, I don’t know if it’s different now). All the reports I read only talked about the stuff on the balance sheet – the only ‘professional’ report I could find on them was a Bloomberg news report. Even though I didn’t understand half the acronyms in the 10-Q, I figured that if Citi had to take those assets back onto its balance sheet and if they had to take writedowns on them, it would wipe out their tiny capital base. But I wasn’t entirely sure until this week, because I didn’t find a single analyst report talking about this. It was as if everyone was trying to pretend there wasn’t a huge pink elephant in the living room that was about to explode. Why didn’t anyone raise the alarm earlier? Is the prospect of a Citi collapse just too frightening to even imagine?

By: ndk

ndk — Fri, 21 Nov 2008 07:25:00 +0000

Over 60% of Citi's deposits are offshore, with varying degrees of local deposit insurance.

Fascinating number. You do realize how strongly this reeks of Iceland, right? I don't think the U.S. will support a national champion at the expense of the country itself.