Forgive comparatively terse comments tonight.
The Wall Street Journal reports that Citi and Merrill could have additional losses of up to $25 billion between them and are scrambling to secure foreign funding commitments of $3-$4 billion at Merrill and up to $10 billion at Citi While the article doesn’t say so clearly, the goal is to secure comitments before the two banks have to announce 4Q results (Citi on Tuesday, Merrill next Thursday).
The article discusses how the foreign investment are getting so large that they are soon to run afoul of formal and informal restrictions on foreign stakes. The story fails to contemplate what happens when these losses at major financial firms deepen (just think at the black hole if MBIA and Ambac are downgraded) and foreign concerns are the only game in town as far as funding is concerned. This is a likely scenario that no one seems prepared to deal with.