Look Out Below - Giant Citi Collapsing Fast → Washingtons Blog
Look Out Below - Giant Citi Collapsing Fast - Washingtons Blog

Wednesday, November 19, 2008

Look Out Below - Giant Citi Collapsing Fast


Citibank is (or at least until recently was) the largest bank in the world. Its parent - Citigroup - was the largest financial services companies in the world.

But as the Globe and Mail writes:

[Citigroup] announced plans yesterday to cut 50,000 jobs.***

The pace of Citigroup's decline has been breathtaking. Only last spring, it was the largest bank in the world, worth more than $250-billion (U.S.).

Today, its market value has withered to just $50-billion, making it roughly the same size as Royal Bank of Canada.

Much of that drop can be attributed to questionable lending and an overreliance on derivatives, two key ingredients in a credit crisis that has hammered pretty much every large U.S. bank.

But Citigroup now looks more vulnerable than most, and many observers are pointing to another underlying cause: a flawed business model.

And Citigroup is getting hammered by credit default swaps. As Marketwatch writes:

CDS spreads on Citi were at 325 basis points over Treasury bonds during midday action, up from a 240 basis points yesterday, according to Phoenix Partners Group.

Christopher Whalen, head of Institutional Risk Analytics predicts that "Citi will be controlled by the U.S. government by next year, and that the next logical step will be to break up the bank and sell the assets."

Is he right?

I don't know. But the fact that the world's largest bank and financial services company have collapsed so far so fast shows that the economic crisis is very severe indeed.

4 comments:

  1. I expect the FDIC to seize Citibank tonight, but it's too large to break up. It follows that nationalization is the only way forward here, but bodes badly for the next falls (MS is definitely gone next, but internationally even worse).

    http://subprimeshowtime.wordpress.com/2008/11/20/citi-never-sleeps-but-dies-crash-imminent/

    ReplyDelete
  2. RBC Bank President Gordon Nixon - Salary $11.73 Million


    $100,000 - MISTAKE (FISHERMEN'S LOAN)


    I'm a commercial fisherman fighting the Royal Bank of Canada (RBC Bank) over a $100,000 loan mistake. I lost my home, fishing vessel and equipment. Help me fight this corporate bully by closing your RBC Bank account.


    There was no monthly interest payment date or amount of interest payable per month on my loan agreement. Date of first installment payment (Principal + interest) is approximately 1 year from the signing of my contract.
    Demand loan agreements signed by other fishermen around the same time disclosed monthly interest payment dates and interest amounts payable per month.The lending policy for fishermen did change at RBC from one payment (principal + interest) per year for fishing loans to principal paid yearly with interest paid monthly. This lending practice was in place when I approached RBC.
    Only problem is the loans officer was a replacement who wasn't familiar with these type of loans. She never informed me verbally or in writing about this new criteria.

    Phone or e-mail:
    RBC President, Gordon Nixon, Toronto (416)974-6415
    RBC Vice President, Sales, Anne Lockie, Toronto (416)974-6821
    RBC President, Atlantic Provinces, Greg Grice (902)421-8112 mail to:greg.grice@rbc.com
    RBC Manager, Cape Breton/Eastern Nova Scotia, Jerry Rankin (902)567-8600
    RBC Vice President, Atlantic Provinces, Brian Conway (902)491-4302 mail to:brian.conway@rbc.com
    RBC Vice President, Halifax Region, Tammy Holland (902)421-8112 mail to:tammy.holland@rbc.com
    RBC Senior Manager, Media & Public Relations, Beja Rodeck (416)974-5506 mail to:beja.rodeck@rbc.com
    RBC Ombudsman, Wendy Knight, Toronto, Ontario 1-800-769-2542 mail to:ombudsman@rbc.com
    Ombudsman for Banking Services & Investments, JoAnne Olafson, Toronto, 1-888-451-4519 mail to:ombudsman@obsi.ca

    http://www.corporatebully.ca
    http://www.youtube.com/CORPORATEBULLY


    "Fighting the Royal Bank of Canada (RBC Bank) one customer at a time"

    ReplyDelete
  3. At one time or another, I do not have the Atlantica online Gold ; at the first time, I am not willing to buy Atlantica Gold . But I do not wonder I buy the Atlantica online money , my friend thinks that I am ill. But when I have it, it carries the magic from such a group, such a link in the world, cheap Atlantica online Gold , it is the key bring you to this world. But buy Atlantica online Gold is the best desire that I make.

    ReplyDelete
  4. Do you like playing in the game which you need to use wow gold, when you do not have World of Warcraft Gold, you must borrow warcraft gold from friends, or you buy wow gold. If you get cheap wow gold, you can continue this game.

    ReplyDelete

→ Thank you for contributing to the conversation by commenting. We try to read all of the comments (but don't always have the time).

→ If you write a long comment, please use paragraph breaks. Otherwise, no one will read it. Many people still won't read it, so shorter is usually better (but it's your choice).

→ The following types of comments will be deleted if we happen to see them:

-- Comments that criticize any class of people as a whole, especially when based on an attribute they don't have control over

-- Comments that explicitly call for violence

→ Because we do not read all of the comments, I am not responsible for any unlawful or distasteful comments.