Citigroup's Pandit Will Reduce Headcount by 50,000, Lower Expenses by 20%
Citigroup Cutting 53,000 More Jobs
Citi to Cut 53,000 Jobs, Boosting Total to 20%
Citigroup to shed another 53,000 jobs
Citigroup's Stock Plunges Despite Major Job Cuts
Will Citigroup (C) Be Sold To JP Morgan (JPM) Or Taken Over Like AIG (AIG)?
If the press is right, Citigroup (C) is about to hold a big pep rally with its CEO Vikram Pandit raising the cheer followed by an announcement that it will fire another 35,000 people. Morale will never be better.
But, the markets are wise, and they are saying that there is a very reasonable chance Citi may not survive as an independent entity. It is no secret that the bank's shares, which are trading below $10, are off much more over the last year than those of the other large US money center banks
Citi is at a tipping point like a cow in a field at midnight. If its stock continues to drop sharply, the market and the bank's customers may begin to lose faith and withdraw assets or cease doing business with the firm. If Citi announces that its financial fortunes will get worse between now and its next earnings report, it may say that the damage within some of its division cannot be contained.
That leaves the question of whether Citi becomes the next Wachovia or the next AIG (AIG). If the Fed and Treasury become concerned enough about the bank and have to intercede with more capital, the government may pressure Citi's board to sell the company to the highest bidder within its own industry. That may be the well-run JP Morgan (JPM) The FDIC might have to guarantee some of Citi's assets to accommodate a transaction, but there is recent precedent for the government to bend in that direction.
If the problems at Citi deteriorate quickly and its falls, as it certainly does, into the "too big to fail" bucket, the government may simply have to pour cash into the bank in exchange for a majority ownership position. That would involve bringing in new management to sell of enough assets to get the bank stable. The government would hope against hope that those sales would bring in enough money for the taxpayer to get some return.
Citi's share price is a signal and it may become brighter and more troubling as the year moves toward a close.
Douglas A. McIntyre
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2 comments:
If the 'demise' of CITI is REALLY the key to PAYMENT, how much more does CITI have to MELTDOWN before we hear something...ANYTHING...??
Of course, we can't forget to consider the 'source' of this CITI connection...
THEY KNOW NOTHING...!!
F.U.
Citigroup Still at Risk, Says Analyst...
Christopher Whalen, Managing Director at Institutional Risk Analytics...
Citigroup is still hugely exposed to weakening consumer debt, and its loans are going bad at the highest rate in the industry. Thanks to an accounting-rule change, Citi will also be forced to put another $150 billion of "off-balance sheet" debt back on its balance sheet, which will put it in an even more precarious position. Citi will end up needing another cash infusion from the government, Whalen says, and this will dilute existing shareholders.
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