Panic at $hitibank......

[marmar]

Citigroup May End Up With U.S. Government Rescue (Update1)

By Christine Harper and Bradley Keoun

Nov. 22 (Bloomberg) -- The U.S. government may step in to rescue Citigroup Inc. after a crisis in confidence erased half the bank’s stock-market value in three days, according to investors and analysts.

Citigroup’s $2 trillion of assets dwarfs companies such as American International Group Inc. that got support from the U.S. government 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.

“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.”

One option is for the Federal Reserve and U.S. Treasury to create a special vehicle to purchase bad assets from Citi. The Fed has already erected several such funds, such as the Commercial Paper Funding Facility, to provide liquidity to the financial system. Typically, the Treasury would provide some first-loss equity or insurance fee, such as $50 billion provided to the CPFF, to protect the central bank and give the fiscal authority a stake.

The arrangement allows the Fed to leverage the money provided by the Treasury with loans, enabling the purchase of assets worth a multiple of the money. Funding the purchases with loans makes them less onerous to the U.S. budget. .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=acxKsnU5HOAI&refer=home

[glowing]

1. Can we let CitiBank go, they are an awful bank.

[Orrex]

2. Those assholes misstate their worth by over $10 billion AND fire thousands of employees

And then they seek a bailout, but yet they act that I'm the one to blame when I'm a day late on a $20 credit card payment.

[chemp]

5. That's one of the reasons why my balance is zero

and has been for quite some time.

I have enough credit on one card to by a brand new caddy.

yet they fluctuate the interest rate, making you call them monthly to knock it back down to the "locked in" rate agreed upon.

All credit card companies are assholes. Some more than others.

[Junkdrawer]

3. Who's in Your Wallet?

:shrug:

[monmouth]

4. Weren't they supposed to acquire Wachovia???.....n/t

[Bandit]

6. Why isn't Congress making them present a Business Plan as they are the Auto Makers?

Why do the Banks and Brokerages get the money no questions asked but the Workers get the cold shoulder? Is it possibly because of Union workers?

[KharmaTrain]

7. Cause When It Fails...Or Gets To This Point...

It's within hours of a total meltdown...Helicopter Ben only flies in with sacks of money for its banking buddies. But then a Shitibank failure would sink a lot more people than three auto companies shutting down...including those whose money, savings and pensions are in that bank.

I'm against bailing all of them out without a major restructuring...if we're gonna nationalize these things, those responsible in creating these messes shouldn't be allowed anywhere near our money.

[doc03]

8. I know I have got at least one credit

card offer from Citibank in the last week, so apparently they have money.

[marmar]

9. That means nothing.....I was getting WaMu credit card offers even after it fell apart....

n/t