LA Times Money Blog: Citigroup woes belie Paulson's promise of banking 'stability'

Many things that Treasury Secretary Henry M. Paulson has said about the credit crunch and financial markets have come back to haunt him.

Now we may be facing a U.S. rescue of Citigroup Inc. — just one week after Paulson assured the American people that the banking system “has been stabilized.”

Citigroup’s shares dived $1.69, or 26.4%, to $4.71 today, leading another meltdown in financial shares, as investors bailed on fears that the sinking economy could torpedo the financial giant.

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