C.Elder

Citigroup Avoids Bankruptcy, Will Citizens Fare as Well?

Without Citi,the whole economy is bankrupt .Every other bank,insurance company and corporation in the U.S. depends on Citi.Either they have borrowed from Citi,or lend to Citi,or have Citi shares,or deposits with Citi,or FX,or derivatives,or individuals have mortgages,college loans,pensions,car loans etc etc.Without Citi,NONE of these things can continue.And please don't say the other banks will step up as they are stretched as it is,and they will go down,if Citi goes down.
The real question is why the Govt continues to allow a small group of people to short the banks and drive down their stock prices,making a huge amount of money in the process for themselves,while causing a major catastrophe for the country?The shorts then turn their attention to the next bank,and then the next and when they run out of banks,it will be the turn of the insurance companies.The shorts will get huge bonuses,and the Govt will end up with all the collapsed banks anyway.Much smarter to not only ban the shorts,but impose a large tax on all short profits retroactively to the beginning of 2008 to help pay for the bailouts.This will stop the shorts from profiting from the destruction of the banking system and help offset the cost of the bailouts.
And by the way,if deadbeat americans paid off their loans as they are supposed to,none of this would have happened!

Will Citigroup Regain Its Lost Luster?

Why so much vitriol aimed at Citi?It has the same problems of the other banks,and many of those have worse ones.Does anyone seriously believe that the business model of Goldman or Morgan Stanley is more solid than Citi's?And BAC that overpaid for toxic Countrywide just as it went into the tank,and then repeated the same error with Merrill-is that the sign of great management?And JPM that bought the problems of Bear Stearns and WAMU when these should have been allowed to die?And Wells that bought Wachovia whose funny mortgages exceed the capital of Wells-is that a great deal ,by a great management who now have a multi-billion lawsuit from Citi hanging over them for the next few years?Anyone noticed that Berkshire Hathaway's stock has dropped by 40% (just like Citi)in the last couple of months?Yet no one is clamouring for Mr.Buffet's head!During this time,Citi has raised lots of capital,sold off businesses,reduced expenses (more than any other bank),reduced its balance sheet(especially in the risky categories),helped millions of americans reschedule their mortgages so they won't be tossed out into the street etc.Yet no one pays attention to the good things done.There is no magic wand-and certainly no other bank has one either.2008 won't be pretty for any bank.But we all need Citi.If Citi does not survive,then no other bank will,as they are all linked together -as the Treasury learned too late with Lehman.So the rabble calling for Wall St. to be punished got its wish with the collapse of Lehman.And since then the catastrophic aftereffects have proved conclusively that allowing Lehman to fail was the mistake of the decade.We all have a lot more to gain from having a positive,supportive,at... to Citi and the others than in running them into the ground.

The Duplicitous Sheila Bair

seems that the real difference in this deal is that under the Citi deal the FDIC would have had an $11billion stake and shared in the clear upside as Wachovia improved,while providing a gtee for any losses in excess of $42billion i.e. highly remote.Whereas in the Wells deal the FDIC gets nothing in the upside,and will still have to buy the poor assets under the TARP.So Wells and Buffet have taken all the potential upside for themselves .Does this not sound like greed?

Corporate Fraud + Government Intervention = Bailout Nation

Instead of another article seeking to blame the banks,and portraying others as victims,why not state the truth?The truth is that deadbeat Americans won't pay back all the money they borrowed on their mortgages,credit cards etc.Yes,they borrowed all that money to buy cars,houses,plasma screens etc, and now are walking away from those obligations to repay and they expect the banks to take the hits.But meanwhile they keep those plasma screens etc.Those are the poeple responsible for the losses in the banks,not the banks themselves.The banks lent them the money expecting to get repaid,when that doesn't happen you criticise the banks!It is too easy in America for unscrupulous borrowers to walk away from their obligations with no consequences to them.Those who declare personal bankruptcy,or don't repay their loan obligations should be forbidden from taking out any further loans for at least 10 years.People would think twice about not repaying,and even better would not get into so much debt to begin with.

Citigroup Reports Loss on Credit Card Securitizations

Instead of blaming banks like Citi,why doesn't Shedlock point the finger at the real problem,namely deadbeat Americans who don't pay off their obligations!Seems Americans borrow lots of money on mortgages,credit cards etc and then just don't bother to pay these off,and expect their banks to take the hits for lending them the money in the first place.Sounds like your borrowers are a bunch of crooks over there.Perhaps American law makes it too easy for people not to pay back their loans?What if the law blocked anyone who had declared personal bankruptcy or not paid back their loans from having any new loans for a minimum of 10 years?I bet a lot more people would pay back their loans,or even better not borrow so much in the first place.

Meredith Whitney Cuts UBS AG, Merrill Lynch and Citigroup's Estimates

More of the same from Whitney,and easy to do too,given that the established trend for banks has been down for the last 4 quarters!What about early 2007 when she was saying what a great company Bear Stearns was?2008 is a poor year for banks,so no one expects much.The second half of 2008 will be slightly better than the first half,but it will be 2009 before the banks start to get the benefits of their cost cuts;repriced loans;asset sales and so on.

Predicting the Financial Sector Rebound

Clearly we all agree that the analysts don't know anything more than we do.For those with short memories Whitney was pushing Bear Stearns as a great company a year or so ago!.So we should ponder why the analysts are slamming other banks?A few ideas for us to think about-it distracts attention from their own institution(note Whitney always slammed someone else just as her own parent co.CIBC was announcing horrendous problems);are these analysts truly independent?Or are they issuing statements to generate more volume of trades that their companies make money on regardless if the stock goes up or down?Note that Citi is the most heavily traded stock in the DJIA,and has been for months-does this make any sense in an economy as big and diverse as America's?Surely industrial companies should dominate the DJIA trading volumes?Well, they don't.It's good old Citi,and this is fueled by...you guessed it the analyst reports;and where do all those volumes get traded...you guessed it,the brokerage companies.As for Goldman's,everyone knows they compete with Citi across the investment banking spectrum,and anything that does Citi down is good for Goldman's.
I wonder though why Citi does not cut its credit lines on Goldman?Without these Goldman would soon disappear.
Anyway,just some thoughts for you all...

Is Meredith Whitney Right About Citigroup?

this Whitney continues to be a one-trick-pony.Maybe she got turned down for a job at Citi in the past,and as everyone knows "hell hath no fury as a woman scorned" .But lest you all think she is intelligent or something,this is the SAME Whitney that was telling investors a year ago (april 2007) how GREAT a company called Bear Stearns was !
Funny how no one points that out to her.Hey whitney why should we pay ANY attention to what you say when you got it so wrong on Bear Stearns?This is also the SAME Whitney who completely MISSED that Bear stearns was going into the tank the week they went into the tank.So I am afraid that she haas been way off the mark on the single most important event in the financial sector-the collapse of Bear Stearns which happened under her nose,but she didn't see it.
Anyone have a list of her other fails,or is everyone's memories too short?