The Back Alley Archives

Are they in trouble?

i'm interviewing w/them actually...went on a second one yesterday as a matter of fact.

i've done a glazing over of their situation and believe they are in trouble like any other financial situation...certainly not the worst of the lot.

vikram pandit has already hinted at a massive writedown that would eventually account for 100% of the remaining writedowns attributed to sub prime mortgage lendings/investments....stock has taken a huge hit this month...something like 70% down...having said that, in terms of capital, i believe i've read that they are in the top 3 of the banking institutions if not 2nd which would indicate to me that they are capitalized....there's talk about a sale or a merger right now...i'd think that if there's smoke, there's always fire...we all know that insurance companies and the like are buying banks right now at deep, deep discounts so that they can as well qualify for TARP hand outs...we also know that other american banks are looking to merge to create more of a global competitor versus other global banks.

at the end of the day, if you believe pandit has purged himself of all of the virus, you should be buying his stock right now...not selling...if you don't believe he's being forthcoming and there's still a lot of unresolved issues on his books, then why buy? certainly not a suitor....the market dictates all and with the stock falling as much as it has in such little time, imho, the market has signaled to the world that citi has bled out....there's nowhere else to go but up imo.....there's still very viable assets in that organization not to mention the strong retail presence they do have.

should be interesting how this all plays out...if you recall, i was away on a golf weekend up in vermont with some of my boys...one of em is a citi exec...he was all stoked about the possible wachovia merger back then in sept...plans fell through as wells fargo stepped in and bested the offer...it was only 2 months ago...i'd be a lil surprised if i hear citi was the one to be bought as opposed to being the one that is the buyer.

Yay for government guarantees!

Alls I know is apparently, they're going to rename the ballpark rad's team plays in.

thanks to the gov't, i own more stock now than i've ever owned at any given time when i WAS working

the gov't right now is regarded to be the best hedge fund client on the street.

Rubin's denying blame w/r/t management and especially himself. That guy is a piece of fucking work.

it's peculiar how these guys seem to follow each other from job to job (rubin, summers, paulson)

The very definition of 'insiders'.

should be interesting how this all plays out...if you recall, i was away on a golf weekend up in vermont with some of my boys...one of em is a citi exec...he was all stoked about the possible wachovia merger back then in sept...plans fell through as wells fargo stepped in and bested the offer...it was only 2 months ago...i'd be a lil surprised if i hear citi was the one to be bought as opposed to being the one that is the buyer.

This was exactly what I was thinking when I read the first part of your post Rad..weren't they just trying to get Wachovia? Now they're hurting? Weird.

My mortgage has moved to them (Citi) and I pay on time...so they got that going for them! Not to mention both Bill and I have credit cards with them and they are making money on us in interest on those!

The citi/wachovia deal came up not long after TPTB decided to let Lehman fail...at that time, I think many of the bigger banks were doing their best to become "too large to fail"...the argument against saving Lehman had been that the risk its bankruptcy posed was not sprawling enough to be considered a systemic risk to the structure of the economy.

Citi likely knew at that point that they had major issues coming down the pike in the next 2+ quarters and didn't want to end up with no life preserver. Fear was rampant at that point, I think.