Citigroup Inc. will probably get rescued by the U.S. government after a crisis in confidence erased half its stock-market value in three days, investors and analysts said.
Citigroup has more than $2 trillion of assets, dwarfing companies such as American International Group Inc. that got U.S. support 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.
“There is no question that 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.”
But somehow not money to help the Big Three. White collar- rescued, Blue Collar – go ahead and sink. Guess we know where this administration stands. Fat cats get fatter.
Well, Jim it is a Democratic controlled Congress. If it was as you say, then it was a great opportunity for the Democrats to further embarass Bush and the Republicans. Maybe there were some other factors involved?
Be it execs flying their jets to DC begging for money or union workers making $31.00/hour playing crossword puzzles, the big three way of doing business is broken. Even the union happy dems seem to have figured that one out. Br. Michael has it right.
If the leadership in Congress was fired-up about this bail-out, they wouldn’t hesitate to pass something and dare Bush to veto it. Sort of like the whole Iraq war thing. For the last two years they could have pulled the financial plug on it anytime they wanted. But they didn’t did they?
Leaders lead. Others make speeches and look for ways to blame someone else.
The article includes this more positive view of Citi’s prospects:
[i] Deutsche Bank AG analyst Mike Mayo wrote . . . that the bank’s $25 billion of reserves, when combined with other resources, “should be enough to cover estimated cumulative losses of $50 billion on loans.’†Mayo rates the stock “hold†and has a $9 price target. [/i]
From today’s Wall Street Journal letters … about the auto makers, but somehow also appropriate for a Citi posting:
[blockquote] GM CEO Rick Wagoner should heed Frank Borman, the president of Eastern Airlines before it went bankrupt, who stated: “Capitalism without bankruptcy is like Christianity without Hell.” [/blockquote]
#5, LOL I’m an interventionist (though I’m souring on GM without dramatic changes in leadership first), but that’s a great quote and so true.
Dirk