Huge Bailout Looming For Citigroup?

[babylonsister]

Citigroup May Get Government Rescue, Investors Say (Update1)

By Christine Harper and Bradley Keoun


Nov. 21 (Bloomberg) -- Citigroup Inc. will probably get rescued by the U.S. government after a crisis in confidence erased half its stock-market value in three days, investors and analysts said.

Citigroup has more than $2 trillion of assets, dwarfing companies such as American International Group Inc. that got U.S. support this year. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke may favor a rescue to avoid the chaotic aftermath of Lehman Brothers Holdings Inc.’s bankruptcy in September.

“There is no question that Citi is in the category of ‘too big to fail,’” said Michael Holland, chairman and founder of Holland & Co. in New York, which oversees $4 billion. “There is a commitment from this administration and the next to do what it takes to save Citi.”

While Citigroup executives say the company has adequate capital and liquidity to ride out the crisis, its tumbling share price may shake the confidence of creditors, clients and rating agencies. A similar scenario played out at Lehman, when Chief Executive Officer Richard Fuld declared the firm was “on the right track” five days before the firm went bankrupt.

more...

http://www.bloomberg.com/apps/news?pid=20601087&sid=a3ArjWNoRSKw&refer=home

[Eric J in MN]

1. They already received bailout money.

If they're too big to fail, then the government should break them up along with similar corporations which are too big to fail.

"$25 billion investment from the treasury"

http://www.nextwave.org/banking/the-9-banks-of-the-bailout/

[babylonsister]

3. So maybe they want more. nt

[Eric J in MN]

5. With AIG, more turned into more-more-more: $150 billion for AIG.

Will Citigroup get $150 billion, too?

http://online.wsj.com/article/SB122644992998319181.html?mod=googlenews_wsj

[WolverineDG]

2. If they do, they'd better erase my balance with them

asshats. :grr:

dg

[cloudbase]

4. Let's see, here. . .

Two trillion dollars in assets, and a market value of 21 billion dollars. Pardon me if I don't get too excited about bailing them out.

[AdHocSolver]

6. Chairman of Citigroup is Robert Rubin, who pushed through repeal of the Glass-Steagall Act...

under Bill Clinton. According to Wikipedia: http://en.wikipedia.org/wiki/Robert_Rubin

(snip)
.......
Of note, the supermerger between Travelers Group and Citicorp was facilitated by the repeal of the Glass-Steagall Act (Gramm-Leach-Bliley Act). This legislation was passed under the Clinton administration, days before Rubin's resignation. Consolidation of investment, commercial banking, and insurance services as practiced by Citigroup under the direction of Rubin has been implicated in the subprime mortage crisis.
.......

It gets better.

(snip)
.......
Critics credit Rubin with helping create the conditions for the Financial crisis of 2007–2008, as a result of the policies he pursued as Treasury Secretary. Together with then-Federal Reserve chairman Alan Greenspan, Rubin strongly opposed the regulation of derivatives, when such regulation was proposed by then-head of the Commodity Futures Trading Commission (CFTC), Brooksley Born. Overexposure to credit derivatives of mortgage-backed securities—and credit default swaps (Insurance on securities)(CDS)—was a key reason for the failure of US financial institutions Bear Stearns, Lehman Brothers, Merrill Lynch, American International Group, and Washington Mutual in 2008.
.......

(snip)
.......

Warren Buffett later called derivatives "financial weapons of mass destruction", and the lack of regulation of derivatives played a key role in the 2008 financial crisis.

Other competent critics of Rubin's philosophy and policies include Kevin Phillips.
.......


If it weren't for corporations like Citigroup, we would not be in economic meltdown. Now they demand that the U.S. taxpayers bail them out. The ultimate chutzpah.

[Ichingcarpenter]

8. They among all the banks helped set up the whole downfall

by the repeal of the act. I'm against bailing out these international entities.

[HCE SuiGeneris]

10. This needs its own spot atop the Greatest board.

:kick:

[Ichingcarpenter]

7. Saudi Arabia...... Folks

Saudi Arabia and Middle Eastern Billionaire Sheiks

That sounds like fun!

Look who the major victors were when the Glass-Steagall Act was overturned
Citigroup. Look at who is involved and follow the money.

[Doctor Cynic]

11. So how much is their stake when the stock price is Zero?

[AdHocSolver]

9. K and R. A few Recs to keep this thread afloat would be helpful. It is important. n/t