Comments on naked capitalism: Citi Mulls Sale of $400 Billion of Assets

Reducing the size of the company is probably the r...

2008-05-09T11:20:00.000-04:00

Reducing the size of the company is probably the right move, but announcing a massive across-the-board asset sale probably was not. It looks desperate, and even if Citi is desperate they should not be *looking* desperate, as that fairly invites lowball bids on assets. Asset sales should be announced one at a time, preferably after buyers have been lining up. But when people see a huge figure like $500B, their first reaction will be to ask where the buyers are going to come from.

And I could be mistaken, but isn't Citi still clinging to the dividend? That alone raises serious questions about priorities.

Don't these near-weekly capital raisings look a bi...

2008-05-09T10:17:00.000-04:00

Don't these near-weekly capital raisings look a bit - distressed?

All converging on Citigroup's balance sheet:
- further writedowns from Alt-A, consumer credit, CRE, LBOs; possible extra kick from monoline implosion still out there somewhere.
- VIEs?
- credit line drawdowns by companies.

No wonder they'd like to shrink their balance sheet: but can they possibly do it in time?

49 1/2

Citi would be nuts to sell their entire credit car...

2008-05-09T04:12:00.000-04:00

Citi would be nuts to sell their entire credit card business, but hiving off some of their card lines might make sense while improving their own brand identity. Citi must, must, must shed assets; of course prices will be bad, but they are capital dead, to me, and have to get the core outfit down to the level of capital they can actually raise while the public authorities are keeping them alive. Rubin is deeply compromised by the last few years, and loathed by many now at Citi for his 'above it all except the check' posture. He may or may not have useful advice, but his name being attached to any policy will only lower the value of the latter. Hey, maybe _that'ts_ the way to be wily, now: hide behind the curtains while whispering in the ear.

"So there may be more complicated reasons for Rubi...

2008-05-09T03:22:00.000-04:00

"So there may be more complicated reasons for Rubin's exceedingly low profile. "

I think it's pretty clear. Rubin thinks he's entitled to a huge paycheck without taking responsibility for anything. A fine example of the corruption in capitalism.