What will happen to Citibank? Will it go under?
no. it will keep on offering a 5% dividend yield, 7% convertable hybrids, and being a huge financial corporation with several profitable and growing business lines.
Their ATM machines will eat your ATM cards, and dispense plush animals instead of dollar bills.
my coworker just got fired today.
Will it go under? No. Will it have normalized earnings of $25B in 2 years? Probably. Is farley13 short C? Probably.
bmwhype Wrote: ------------------------------------------------------- > my coworker just got fired today. What group are you guys in?
Henry F. Potter will begin offering depositors 50 cents on the dollar…cash too. But Mr. Potter will be foiled yet again when Pandit’s wife uses money from their honeymoon to keep them afloat.
In Q1 2009 they will announce a merger with Gringott’s bank.
Countrywide didn’t go under so I don’t think Citi will.
Countrywide didn’t go under so I don’t think Citi will.
Countrywide didn’t go under because BofA (had to) bought it, otherwise, it’s stock was headed to 0. Citi and Countrywide are two completely different banks, and one is obviously more diversified than the other. BUT, IMO, the credit derivatives are the next leg to collapse, and we will see how Citi fares at that time.
It will be very scary, yet morbidly interesting, to see what happens when corporate default rates start to rise. CDS alone is going to be a huge headache.
Yeah, and if Citi is headed to 0, I’m going to buy it. There is enormous value left in Citi and it is just too big to go away.
Too big to fail? Citi could be too big to bail 
BofA really had no choice but to buy. If CFC was left alone it goes under, and BofA sees their investment substantially screwed. If CFC comes alive and goes to 25, they back out and are ok, both win. I think that BofA saw alot of value down the road, and will establish better management and risk policies. Their initial investment ends up being saved as they aquire the whole thing at a huge discount. They’ll grow the mortgage side up and profit immensley over the next 5 years.
Citi has been in business for over 100 years and do business in over 100 countries - they survived the great depression and world wars. They have great human capital. 18.x billion will go down as a blip in its history…
I wouldn’t rush in. I can see how Citibank could actually be worth less than zero (from an equity investor’s standpoint).
Yea - saying that a company has been around for a billion years does not mean it will be around tomorrow. The point is, we don’t know what is happening - they are not transparent. What we do know is that they are acting like a bankrupt company and seeking more and more cash every quarter. If things get more dire, anything is possible. Not to be a perma-bear, but the paper-game seems to be nearing its end.
I suspect Citi, and Merrill to that end, will be reporting very good profit come 2008 or 2009. The reserve that they are taking is, in my opinion, an accounting shenanigan: big bath, as covered in the CFA curriculum. I quoted Investopedia: Big bath is “The strategy of manipulating a company’s income statement to make poor results look even worse. The big bath is often implemented in a bad year to enhance artificially next year’s earnings. The big rise in earnings might result in a larger bonus for executives. New CEOs sometimes use the big bath so they can blame the company’s poor performance on the previous CEO and take credit for the next year’s improvements.” And that is exactly what I think the new CEOs of Citi and Merrill are doing.
i bought Citi after it dropped to 33… and now its -20%