Citi will never go under, the government will never allow it. I work for a federal banking regulator and my coworkers and I have discussed this extensively. It is simply to big to fail, the time and difficulty it would take to liquidate that bank would be ridiculous. Citi probably has a ton of correspondent relationships that if it failed, all the money the correspondents had at Citi would lose so much(if not all) of its value. It would cause so much widespread financial panic, it would cause a massive run on the bank. If Citi were to fail, then BOA, JP Morgan, Wachovia are all game fair as well if they were to run into trouble. You can’t let one fail and bail out the others. The govt regulatory agencies (FDIC) has a ton of cash reserves from the deposit insurance it charges all banks. They would simply throw as much money at it as possible to stabilize the bank. I have experience in this, but on a very smaller scale.
It certainly cannot fail. Simply capital adeqacy comes under pressure. Brand name like citi can obtain even more capital injections.
busy_people Wrote: ------------------------------------------------------- > Citi has been in business for over 100 years and > do business in over 100 countries so did dinosaurs “Dinosaurs were the dominant vertebrate animals of the terrestrial ecosystems for over 160 million years” (wikipedia)
Forget about the stock price and how management is acting and all that other stuff. The US govt has an enormous interest in the stability of the banking system and essentially access to all the capital in the US (the “too big to bail” thing is not even close). Letting Citibank go under would cause huge instability that can’t happen. If you get old enough, you live through everything at least twice. In 1987, if there existed this kind of forum (there wasn’t) there would have been the same discussion about Citibank in the context of emerging market debt. The govt just found some academic justification from Brookings or something that said everyone would be better off if the govt bailed them out so the govt did it and hence Brady Bonds were born.
James Grant talks about how the entire US banking system is just a big extension of the US Treasury. He adds the point that he’s fine with it, but to be fair lets at least start paying CEOs on a public sector pay-scale.
One year ago, I thought Countrywide was too big to fail… One year ago, it was.
Agree with Michael and Joey. See Continental Illinois. Then again, Bernanke is no Volcker.
Citigroup will just have to scale back. While it has the image of being th#1 bank in the world…that will have to change.
middle eastern and chinese $$$$ will continue to bail it out
they may sell off a unit or two, but will never go under as a whole entity. Remember, LTCM.
Jaime Dimon must be grinning right now. I wonder what would have happened if he succeeded Weill. Probably the same thing.
BosyBillups Wrote: ------------------------------------------------------- > One year ago, I thought Countrywide was too big to > fail… One year ago, it was. Nothing like bolstering your argument by pointing out that you were wrong before. Do people at work scratch their heads when you do that? I would say that Citi is about 10 times bigger than Countrywide ever was. Anyway, I must have missed the Countrywide bankruptcy filing. When did that happen?
I heard that China didn’t want to invest in Citibank. 
JoeyDVivre Wrote: ------------------------------------------------------- > BosyBillups Wrote: > -------------------------------------------------- > ----- > > One year ago, I thought Countrywide was too big > to > > fail… One year ago, it was. > > Nothing like bolstering your argument by pointing > out that you were wrong before. Do people at work > scratch their heads when you do that? > > I would say that Citi is about 10 times bigger > than Countrywide ever was. Anyway, I must have > missed the Countrywide bankruptcy filing. When > did that happen? I was wrong before, and I will be wrong again. BUT, I thought that WAMU was too big to fail too. It looks like JPM balked at buying it after seeing CFC. No BK filing - but take a look at the one year chart of CFC. Can you honestly say that the market was not starting to price that in? Or, that they were not CLOSE to a BK filing? You should read the news. Now take a look at the one year chart of C. Any similarities? Bottom line is that it won’t file for BK. Just like CFC did not. But there is such thing as a synthetic BK filing. You don’t know. I don’ t know. And let’s leave it at that.
A synthetic bankruptcy filing? Is that like an imaginary friend? As far as charts go, the chart for C looks an awful lot like the chart for MER so I guess they’re going synthetically bankrupt too.
MER’s not in the business of creating SIVs, buying Subprimes, having massive amount of exposure to CDS default, etc. So no, MER is not. I hope C has hit a bottom, believe me. I just think it’s wise to consider all sides of the situation.
they charged me $60 becuz my checking account was 2 cents short
xiyiziLi Wrote: ------------------------------------------------------- > they charged me $60 becuz my checking account was > 2 cents short That’s got to be a world record for interest charges. 60 to borrow .02 for a week.
@ 59.99
Just spoke to a “Technician” who said C at $8-$14 is very realistic. FYI