Statements by Fed, FDIC, Treasury on Citi Bailout
Submitted by
CalculatedRisk on Sun, 11/23/2008 - 9:19pm (388 comments)
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really
No kidding
th
OMFG. Nuts, nuts. Ponies everywhere.
We are all Citi now.
The nonperforming assets remain trapped in the system, threatening to create zombie banks. Bernanke might not be making the same mistakes as the Fed in the Great Depression, but it is starting to look like he is not willing to fundamentally address the problem of sour assets. Doing just enough to keep banks alive looks a lot like a mistake made in Japan. I am surprised that New York Federal Reserve President Timothy Geithner would accept such a plan; he understands Japans lost decade as well as anyone.
I think it is high time some real critical attention was placed on Bernanke. How complicit was the Fed Chairman with designing and implementing a clearly failed policy? Yes, one could argue that the ball was in Treasurys court. But didnt Bernanke have a duty to make TARP work, after he begged Congress for the plan? And isnt he the one person who could stand up and say No, Paulson is screwing this up? Paulson will not be Treasury Secretary in January, but Bernanke will still be Fed Chairman. Bernanke can and should step into what is so clearly a leadership void. What does he owe this administration at this point?
Fed Watch: Policy Totally Adrift; Be Afraid, Be Very Afraid -- Seeking Alpha
Makes me want to puke.
$300bn to Citi.
$0 to the automotive industry, because we are "capitalists" and bad businesses must die.
The US refuses to realize that the financial sector MUST shrink, and that the actual productive means of the economy are what ultimately counts.
It's disgusting that we'll dump all this money on Citi, and then claim, that we have no money to ensure that everyone has healthcare or to extend unemployment benefits or to give a bridge-loan to GM so it can go into Chapter 11.
Appalling.
Charles Ponzi must be cursing from his grave. Why did'nt I get born in this Golden age of Pirates.
Well, this just means we'll be summering in Aspen.
I guess CR never sleeps
Well f-it. Call a spade a spade...
Joining in the Comrade solidarity
"Up to $306 bn in assets to be guaranteed (based on valuation agreed upon between institution and USG)."
Like the original TARP, it all depends on the valuation. Any thoughts?
why won't every bank want free puts and cheap capital ? If the line at the TARP is moving too slow, maybe smarter to switch lines to the new faster 'Citi Pla
Another never ending bailout. This thing is going to cost a Trillion between AIG and Citi when alls said and done.
Repost:
If this is a new idea I want CREDIT.
If not, I second it.
No new currency is needed.
All future contracts will be adjusted by a price index of billions of transactions of any and all kind upated every second. The index will be freely accessible, based on open source software and hardware.
Gaming the index by false input of data will be policed by social ostracism and all other network tools familiar to users of e-bay, my-space, facebook, etc.
It could be accomplished by US Thanksgiving if some bright programmers set it up.
1 currency soon [yogi] | 11.24.08 - 12:28 am | #
Exercise Price: The strike price will be equal to $10.61 per share (the 20 day trailing
average ending on November 21, 2008). The warrants issued
We will work to support a healthy resumption of credit flows to households and businesses.
We will exercise prudent stewardship of taxpayer resources.
We will carefully circumscribe the involvement of government in the financial sector.
We will bolster the efforts of financial institutions to attract private capital.
Um, when?
Anon
Ponzi is the father of American banking.
Is C still allowed to pay common dividends? Any clawbacks? More BS. How many warrents we get? if by some miracle we pull it off, and the economy gets by with just a nasty recession, we get all of 8% for a high risk investment. We should have min 50% equity stake for this, dilute the heck out of the existing shareholders. Then if we get a recover maybe 10 years down the road, the govt sells it off for a big profit and we use proceeds to pay down some of the mega debt. Cant anyone here negotiate with a friggin beggar?
It's Putin's fault.
If he'd mounted a creditable thread early enough, all this money could have been dumped into the military-industrial sinkhole where it was expected to disappear with flags waving.
Without a way of burning up imaginary money, it accumulated and the playboys started gaming with it and blew up the market system instead.
That clever Russian has proved that Kleptocracy really is the only effective form of government, by tricking the USA into becoming one.
BDiego,
no. My comment was entirely facetious.
Why do Americans have such trouble grasping facetiousness?
ahahahahhhhhhhhhhhhahahahaahahahhaahahaHAHAHHHAAHAHhahshahahahaha
p:"The US refuses to realize that the financial sector MUST shrink"
Bingo...but pain is not something Americans take easily, and if it can be postponed until tomorrow, that is the road that will be taken.
ZombieBank never sleeps.
Tim & the Xmas Miracle writes:
Another never ending bailout. This thing is going to cost a Trillion between AIG and Citi when alls said and done.
Man, where have you been? We passed a trillion back in Albuquerque
the whole thing makes me sick
i just keep thinking
this is a nightmare
i gotta wake up...
just wake up
wake up
From the term sheet:
Institution is prohibited from paying common stock dividends, in excess of $.01 per share per quarter, for 3 years without UST/FDIC/FRB consent. A factor taken into account for consideration of the USGs consent is the ability to complete a common stock offering of appropriate size.
Hmm.
"friggin beggar?"
Beggar to us, club member to the negotiation team.
Comrade lurker
Trillion dollars guaranteeing their capital.
With Summers, Geithner and Peter Orszag on the inside in the White House, its difficult to imagine a better team than that, said William Bernstein, author of A Splendid Exchange: How Trade Shaped the World.
Summers Said to Be Obama Pick for Top Economic Post (Update2) - Bloomberg.com
I can't wait to hear the other banks wail about not having reciprocal facilities. Of course, our 'leaders' will fold, and the remainder of the $700B will be gone.
The points about GM are well-stated. I never got why everyone railed on them and not the banks. Maybe it's because GM can't help inflate one's home value?
Lastly, I keep wondering when these programs will end? At Thanksgiving next year, will we be talking about the same thing?
Incredible.
As someone said - 200 years of credibility is being torn apart in a single month.
By the way, did Jas jump out of the window?
Don't lend a dime without demanding repayment based on an established world price/currency index, or basket of such socially developed indices.
And where does C open? My guess 1.90.
"based on valuation agreed upon between institution and USG"
Actually, this will be the fun part. No matter how high or low the assets get valued at, it should be an 'interesting' day the day the valuation numbers get published...transparency vs. solvency, everyone will see which the government backs. Either choice could cause a "down" day.
And Bob Rubin gets to keep his job and his previous ill-gotten bonuses and excessive salary.
Disgusting.
and to think...just 6 months ago the system was still trying to put across that the whole "credit crisis" would be the size of LTCM (a friggin oxymoron if ever there was one).
What we have seen just tonight is almost the same size as the entire LTCM bailout (in terms of bloated asset valuations)
Ciao
MS
Should have been the same terms as AIG, the origional deal, not the later giveaway plan. Time to go back to the origional terms for AIG too.
"Citigroup will... implement the FDIC's mortgage modification program."
Free money for anyone who borrowed too much. Interesting incentive scheme that I, and a few millions of others, will remember for future reference.
There were liar's loans. Now we get liar's mods. I am 100% sure that a large number of people, assisted by 'professionals' will find ways to have their debt forgiven by 'understating' their income.
Lastly, I keep wondering when these programs will end? At Thanksgiving next year, will we be talking about the same thing?
Unemployment will be a bigger issue.
sc writes:
And where does C open? My guess 1.90.
3 dollars.
When they release the valuation numbers for Citi, will they also release the other numbers for all of the other dodgy collateral they've taken?
To quote Sam Rayden: "They were playing the bass tuba the day it rained gold."
I think that unless we kill 95-97% of bankers, we won't have a functional society in two years.
translation: for "stability", "commitment" and "preservation"
I know you're mad right now, but please don't be. This is what's best for the both of us. You'll see. You have so much to offer, I know you'll be fine and happy, some day. Look, it's not about her, ok? I mean it was going to happen eventually, we both knew it would. It was either her or that girl you saw me talking to all last week. Yea, she's kind of a loser too, but I can't help myself. I just want to help everybody, you know? I guess I'm just self-destructive. And I sort of blame you for that...but let's not fight ok?
Yes, it's going to be tough. I'm going to miss your smile, and your shiny car and big tv...but you know what I'll miss the most?
You're apathy.
Stunney,
I do not believe you. Your "joke" was not funny.
"the day the valuation numbers get published."
Don't expect any more clarity than with the Maiden Lane assets.
Like I said. The financial singularity is here. Assets are all 'grey', and balance sheets mean nothing. Morals become hazardous. And hazards are morals.
And its only November.
DJIA: SOMALI PIRATES TO REPLACE C.
Friardaddy
good point. But there will be two prices the current price and the "real" value in a "normal" market. see Maiden Lane
This can in no way be interpreted as a positive, BUT the futures are up.
ARGH!
The agencies have no more money, they are spreading the losses around this time.
I was prepared to think that the USD will hold up better than other world currencies vis-a-vis all that global easing.
But now am inclined to think, the USD is the only currency that they can print ad infinitum.
Let The Great Decline commence.
They plan to keep the yields low in anticipation of next years borrowings, lets see how they do that now.
Well, that leave JPM, MS, WFC, and the GoldenOnes. The too big to fail financials bailout list is getting shorter. They'll all need the same within months.
I have a bad feeling about how this might be one day considered the beginning of the end of this phase of history.
futures quotes vary tremendously from site to site. Update please?
where does C open up?
it will trade up in PM......at what level? possibly $5.....after that I have no idea. Depends on how good a show they want to put on.
Most institutions have skeleton staff the entire week...I think that was part of the plan from the get go.
I wouldn't bet money on it but it wouldn't surprise me if they pushed this back to $10 by friday. Make the arabs feel good about themselves for a few days or something like that.
Ciao
MS
GoldenOnes, MS are next. There was talk about merging them with Citi. This might throw a wrench in that. GS will trade down IMworthlessO
friardaddy writes:
Lastly, I keep wondering when these programs will end? At Thanksgiving next year, will we be talking about the same thing?
friardaddy | 11.24.08 - 12:41 am
I have a dark feeling that Thanksgiving of next year we'll be talking about something very different.
NOT Irving Fisher,
I think you are in need of some kind soul to explain to you what the thread is about (hint: something about a massive governmental bailout of a large bank), and then how totally, 100% the opposite of that was the premise of the literal meaning of my comment. Then look up 'facetious'.
Either that or drink a couple of sixpacks.
I would not be surprised if the SHTF before easter 2009.
//I have a dark feeling that Thanksgiving of next year we'll be talking about something very different.
Anonymous | 11.24.08 - 12:49 am | #//
Obama promised 2.5 million jobs. That must mean they are expecting 8% unemployment. It will be closer to 10%.
A) When does Obama come on TV and tell Americans: "Look, you need to pay your bills..."
B) When does the U.S. Government start distributing pamphlets with talking points to explain to your kids why 50% of their gross pay will be used to payoff debt?
"The points about GM are well-stated. I never got why everyone railed on them and not the banks. Maybe it's because GM can't help inflate one's home value? ....
friardaddy | 11.24.08 - 12:41 am | #"
You hit the nail on the head, friardaddy. There's an enormous groundswell of interest in keeping home prices high. Keeping the baby boomers who didn't save enough (=99% of them) in comfort depends on it.
whew, thank god, guiding principles!
what is this, saturday night live?
GS is the smartest kid on the block. They operate extremely well when the rules/playing field are clear. Unfortunately for them the current environment is completely unpredictable, mostly due to the US gov. That simple fact may sink the ship.
Its all cool, hell as long as the rest of the world digs our paper baby, thats all we need.
puffs cigar
"'professionals' will find ways to have their debt forgiven by 'understating' their income."
During the RE bubble, there were (and still are) online companies that would print up fake pay stubs to allow you to "document" an inflated income in order to qualify for a big, fat full doc loan on a house that you could not reasonably afford.
I'll bet those same companies can now be used to falsify income documentation to the downside, to allow you to get a loan modification.
Use the firm twice, once to inflate your income, and a second time to deflate your income, and you can have a house you could never have afforded, and end up paying even less for it than people who bought before the bubble.
Freakin' genius, I wish I had the foresight to see this little scam.
So what is the nominal value on the $306 billion in loans? Do we know? Will that information be given out? It would have to be at least 600 billion would it not?
Jesus H Christ. These guys have to burn $500M a quarter in profits just to pay the divie on these new preferred.
The shit already hit the fan....
They've been on "cleaning" duty since September.
Eventually the fan will not come clean....we are just starting that phase now.
C will need another $25-40b just to make it to Easter...by then it will be on someone else's watch.
Ciao
MS
When the history books are written Lehman Bros will be seen as the Credit Ansult of our time
HPM... be careful. that pay stub guy might start spamming us again.
repost from last thread to 1 world currency (yogi):
I like the computer idea.
But will it oink?
$11T on the national debt is looking good.
I've got the over.
Oh, it's not the end of the world, just the end of the dollar. The US Constitutional system has survived currency collapses before and the new one to emerge from the dust, based on a world price index determined by every internet user in the world will pay real "dividends".
Is that Anstalt? Or Insult. Its both, but for clarification...
AFP sat nov 22
"The IMF's chief economist has warned that the global financial crisis is set to worsen and that the situation will not improve until 2010, a report said Saturday.
Olivier Blanchard also warned that the institution does not have the funds to solve every economic problem.
"The worst is yet to come," Blanchard said in an interview with the Finanz und Wirtschaft newspaper, adding that "a lot of time is needed before the situation becomes normal."
AFP: Worst of financial crisis yet to come: IMF chief economist
"During the RE bubble, there were (and still are) online companies that would print up fake pay stubs to allow you to "document" an inflated income in order to qualify for a big, fat full doc loan on a house that you could not reasonably afford.
I'll bet those same companies can now be used to falsify income documentation to the downside, to allow you to get a loan modification.
Use the firm twice, once to inflate your income, and a second time to deflate your income, and you can have a house you could never have afforded, and end up paying even less for it than people who bought before the bubble.
Freakin' genius, I wish I had the foresight to see this little scam.
Hank Paulson's Mom | Homepage | 11.24.08 - 12:52 am | #"
Please remember to send Sheila a thank you note.
We will continue to use all of our resources to preserve the strength of our banking institutions and promote the process of repair and recovery and to manage risks. The following principles guide our efforts:
Blah blah blah blah.
Whatevs.
I hope Team Obama is drafting a lot of anti-trust lawyers because the big banks have got to go.
PeakVT:
I said it before, I want Teddy Roosevelt as president for these guys.
Carry the big stick and break them apart.
It sucks so bad being an actual business that builds things... You have to provide Uncle Sam with a business plan before leaving town with a check for ~20 billion.
I think what's been missed with some of these businesses which "can't be allowed to fail" is that nobody is willing to recognize that a) they've already failed, and b) in a "human capital" business, failure is best addressed by replacing the top tier of "capital." By all means, bail out the balance sheets, but nuke the common and preferred shareholders, force a 20% haircut on the bondholders, sack the top two or three levels of management, and hire capable managers beholden to Treasury. That's all I ask.
The points about GM are well-stated. I never got why everyone railed on them and not the banks
Because "everyone" works for, directly or indirectly, the financial sector.
If you poll the populace at large instead of the fund managers and GE flunkies that try to shape opinion on CNBC and the like, I think you'll get a different picture.
I have a feeling that 52,000 job cuts are not going to be enough
I'm surprised gold and silver didn't spike with this wonderful news!
Time to load up on more.
AHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
can someone explain to a poor guy who makes 80 thousand a year why CITI is getting over 300 billion and I a still unable to afford a house?
Thanks
300B bailout, dollar flat against most currencies, gold down off it's high pre-announcement.
Smells like deflation to me.
AJ
my sentiments exactly
You can choose to make it oink, quack (which I have no doubt many were thinking) or sing. You can call it Forex, Amazon, Google, newdollars, but no mention of god please, and it must be free.
mock turtle:
The IMF used to be horribly wrong with their predictions and worse with their cure.
But this time am inclined to believe they are more right than most.
From way up top:
$0 to the automotive industry, because we are "capitalists" and bad businesses must die.
No. It's mostly a union hating/breaking tactic.
They have to create a new bubble. It will probably be the carbon trades. GS is licking its chops to get their grimy little piglet fingers on the moulah that is possible from these trades when implemented. We will be sold ANOTHER bill of goods about it being good for the environment and our children's health and blah blah blah.
I guess the general population deserves what we are getting because we have stood back and let it happen. The poor, uneducated and weak are suffering the most from this little financial war.
NOT Irving Fisher --
futures quotes vary tremendously from site to site. Update please?
Not much to say. S&P futures bid/ask is 803.00/803.25, up maybe 10 points from 90 minutes ago but flat for the past hour.
Nothing terribly surprising happened tonight...
Dividend - gone. First $2B a year - to the gov't. Nearly $3B in warrants. Miss on the divie, lose control of the board.
Markets are strange beasts, but there is no fundamental reason this stock should be trading above $1 tomorrow.
US: RANSOM PAYMENT TO SOMALI PIRATES WILL PROMOTE FINANCIAL STABILITY.
US: 10-YEAR GUARANTEE OF SOMALI PIRATE DEBT TO PREVENT ECONOMIC COLLAPSE.
SOMALI PIRATES; PLEASURE DOING BUSINESS WITH YOU.
Meaculpa
good points, both
LastManStanding writes:
Is that Anstalt? Or Insult. Its both, but for clarification...
LastManStanding | 11.24.08 - 12:55 am | #
Well I had the former in mind, but call that a fruedian slip (aided by some of CSC style smoke) It certianly was an insult, but hey we are taxpayers, we are getting used to being insulted
PeakVT --
No. It's mostly a union hating/breaking tactic.
Out of curiosity, if I despise unions and I also despise banks, what does that make me?
Serious question. I don't feel like I have a label anymore other than "cynic".
@ RationalJeff,
can you verify your income by showing us your pay stub. We trust you, but we need verification.
Cinch
We have created a miracle product, digital processing, which is so cheap that it is virtually free. We are at peak paper.
breaking news
madagascar news service
viking pundit agrees to sell smyth blarney to the somali pirates in exchange for one saudi tanker and contents and
that he be allowed to join... indicating he has pirate experience
The Preferred shall be non-voting, other than class voting rights on (i) any
authorization or issuance of shares ranking senior to the Preferred, (ii) any amendment to the rights of Preferred, or (iii) any merger, exchange or similar transaction which would adversely affect the rights of the
Preferred.
Could somebody please get them a dictionary so that they can learn the difference twixt regulatory and participatory? Frankly I don't see how anything is enforceable when nothing is is prosecuted.
I think what's been missed with some of these businesses which "can't be allowed to fail" is that nobody is willing to recognize that a) they've already failed, and b) in a "human capital" business, failure is best addressed by replacing the top tier of "capital." By all means, bail out the balance sheets, but nuke the common and preferred shareholders, force a 20% haircut on the bondholders, sack the top two or three levels of management, and hire capable managers beholden to Treasury. That's all I ask.
Ralph Cramdown | 11.24.08 - 12:57 am
I'm with you. It's not ask for much, Ralph. Just a reasonable level of accountability. That's been my gripe all along.
I'm convinced nothing will change (policy-wise) until the equivalent of a financial 9/11 happens.
And it will need to be a surprise. Something to the effect of waking up on Tuesday morning and reading that effective immediately, no more countries will lend to the United States.
That's the only thing that will get the sheeple to bring out the torches and pitchforks.
Otherwise, it's a slow grind and most will acknowledge the problem, but won't do anything about it.
I am increasing the amount of money put into federally insured accounts.
It is that or get a pirate ship.
The Preferred shall be non-voting, other than...
I can see why Citi management preferred this.
Is anyone being prosecuted for taking my money and trashing it?
I'm convinced nothing will change (policy-wise) until the equivalent of a financial 9/11 happens.
It's happening. The firefighters are in the buildings. We're waiting for the collapse of the towers.
Where is the SEC?? WTF? If these guys say the were in great shape why do they need this backstop? Someone needs to go to jail!
stunney:
Your comment was also racist and pointless. Again, I take it you voted for Bush and McCain?
Non-voting...however, they need approval for divy.
ya wanna vote
take money out of the system
What will be the likely impacts of the Citi bailout bailout on the credit markets?
largest bank bailout in history. Ho Hum. Just another day on the high seas of finance.
We also control their bonus program...they were on the verge of collapse and they were lying! Send Pandit to jail!
crispy&cole - right on.
There's got to be upwards of 500 financial institutions that committed serious fraud.
Enron went down. Where's the FBI, SEC, Justice Dept, OCC, OTS (oops, nevermind they don't do anything), and IRS putting these jerks in the can?
Crispy has a point. Recent public material statements were clearly meant to mislead the markets as to the true condition of Citi. The SEC needs to do a perp walk.
Limited Voting Rights, Why???
Because
We will carefully circumscribe the involvement of government in the financial sector.
Or maybe we should just nationalize all industries so the government can run them right.
Citigroup has $123 trillion in off-balance sheet entities
How Banks Aim to Obscure Their Losses - Interview with Lynn Turner
"It is that or get a pirate ship."
It would be nice if you could buy an ETF that invested in Pirate companies...
Oh wait, I guess we already have those.
Nice seeing you on the ferry ride. Guess I won't be seeing you for a while...
(formerly Send lawyers, guns, and money)
BDiego-let it go. I didn't see the comment so apparently CR agreed (which is saying a lot!)
ah, for the hell of it I'll go close my three accounts at C tomorrow.
anyone have a recommendation for a safe large international bank I should bother opening new accounts at so I don't have to do this again? ... ? anyone?
E.g.:
Spot price for a laptop:
Hundreds of sites will search thousands of sellers for the best price for a particular model in any currency you wish. 1 click and you can read customer reviews of the reliability of the seller, and ratings of such reviews (derivatives).
Why not for all commodities? Then just crunch em all up. Why wait for the bullshit, obsolete CPI or PPI?
BDiego: calling Obama 'black' is racist? Or did I miss something else?
For those interested:
Got Gold Report COMEX Commercial Short Positions Still Low For Gold, Silver
http://www.resourceinvestor.com/pebble.asp?relid=48202
A well written and informative article on Comex futures regarding silver and gold.
Maybe Paulson was right - martial law is in the offing?
They better hope this pumps up the market for the next 6 weeks or it's gonna get ugly.
I have a feeling that 52,000 job cuts are not going to be enough
Dirk | Homepage | 11.24.08 - 12:58 am
And they are about to hire 1000 in the Philipines. Nice.
if I despise unions
Why do you hate unions? (I'll pick up any response in the morning.)
Early - consider a credit union.
When the history books are written Lehman Bros will be seen as the Credit [Anstalt] of our time.
Dirk | Homepage | 11.24.08 - 12:54 am
Dirk, I'm glad you clarified the term, but the statement still goes over my head.
Are you suggesting that letting Lehman Bros file BK somehow convinced the financial geniuses in Washington that they could not allow that to happen again?
BDiego, there's not much to say to you except "Lighten up, Francis."
Stunny claimed that Obama was a "black Marxist radical." The only true statement of those threee is that Obama is black, to some degree. That isn't racist. But Obama hasn't made his first his appointments like a Marxist radical, even though he's known his share of them. So what are you getting your Biden in a uproar for?
How many poor suckers are left who don't check the internet before buying a car? Dealers are obsolete. So are different currencies.
No Compensation clawback provisions in this term sheet and no mgmt changes....joke!
BTW, what's all this talk about limiting bonuses at Citi?
I thought we covered that in TARP v1.0
So when the CEOs of Citi decided to cut 50000 jobs, did they consider reducing their own pay, so they could keep staff on to do work for Citi? Did anyone in the Citi consider taking pay cuts or reduced benefits to keep people in jobs?
I expect the difference between the banks and auto companies treatment by everyone has more to do with, unions and the image of autoworkers versus the image of the dressed up bankers, than the threat of systemic risk if a bank would fail.
When the history books are written Lehman Bros will be seen as the Credit [Anstalt] of our time.
Dirk | Homepage | 11.24.08 - 12:54 am
Dirk, I'm glad you clarified the term, but the statement still goes over my head.
Are you suggesting that letting Lehman Bros file BK somehow convinced the financial geniuses in Washington that they could not allow that to happen again?
sportsfan | 11.24.08 - 1:17 am | #
Credit Anstalt was the bank that failed in Austria that was sort of the lighting of the fuse that caused GD1
I'll be seeing you, in old familiar places.
Did kash-kari make this up?
Financial 9/11 = cannot be bailed.
Anyone have any idea how dilutive this is to current common stockholders?
Also, why no haircut for debt holders or other preferreds? They are made whole by US and we take a big chunk of the losses.
339 visitors late on Sunday?
Early indicator of CRVX for tomorrow?
Sometimes I step back from this a bit and I find myself scratching my head. We need to give hundreds of billions if not trillions of taxpayer dollars to the banks, and why? Because we hope, but can't be certain, that we'll have the opportunity to borrow that money back from them at interest, and if we don't we won't have enough money and the economy will collapse.
OK, I know it's not quite that simple, but....
There simply has to be a better way.
I also want to know how far they assets have been marked down....was this $300B of assets sitting in Level 3 at the full amount? If so...
"There simply has to be a better way."
There is the 2nd Amendment.
anyone have a recommendation for a safe large international bank I should bother opening new accounts at so I don't have to do this again? ... ? anyone?
Early withdrawl | 11.24.08 - 1:14 am | #
shoe box under the bed international
or
first mayonnaise jar buried in the garde
Also, why no haircut for debt holders or other preferreds? They are made whole by US and we take a big chunk of the losses.
crispy&cole | Homepage | 11.24.08 - 1:21 am | #
Ahh...there you are getting right to the crux of the matter. Who are the holders of the debt and the preferred? And who are "we"?
Part of me welcomes the pitchforks and Treasury runs.
c&c,
"(based on valuation agreed upon
between institution and USG)"
Soon it is time to short Google, Microsoft, Yahoo, whatever's left.
The open source revolution will kill them together with the banker/arbitrageurs. A great expression of American ideals of freedom.
friardaddy-
I think I get why regular americans are riled about the auto bailouts and not the "financial industry" (can we still call it that?) bailouts.
It's because they believe they have an understanding of the auto industry from daily life. So they tuned in and perked up when it was mentioned.
But they don't really see/understand how banks, credit effect them. Or they think it's too complex. The average American does not understand that these people and entities run everything about their lives, from home prices to college tuition to the cost of a dozen eggs.So they've just ignored the whole thing.
I think that if Americans really understood the basics of what has gone on here, and how it affects every aspect of their lives -to their detriment- they'd go Christ-like on their a$$es pretty quick.
Education is needed.
Q: What's the difference between Citi and the Somali pirates?
A: The Somali pirates didn't vote for Bush.
The Baseline Scenario doesn't like it.
'night all
Dirk,
It thinks its a one-two punch. Bear Stearns is Creditanstalt of our times. The turmoil all began when they chose to freeze redemptions, citing an inability to value their CDOs. While Lehman is the upper cut to the chin in the sixth round.
"(based on valuation agreed upon
between institution and USG)"
Allen C | 11.24.08 - 1:27 am | #
Which reminds me...anybody know what happened to the "Going Private" blog? It seems to have died right after the posting of the "Paulson" episode of "The Spiral" (negotiation between "institution" and "USG", so to speak).
Overtaken by current events, I suppose. Some things are simply impossible to satirize.
In the Sunday NY Times articles, they mentioned that the assets were being at marked at "between 21 and 41 cents on the dollar". That is starting to sound reasonable. However, if I as a taxpayer am going to be forced to own a piece of C-hit
I want to know what the bonds are, particularly because I know how to look at them. This should not be hidden from us.
Largest bank bailout in history. Ho Hum. Just another day on the high seas of finance.
lawn grass | 11.24.08 - 1:11 am |
Well, after all, not all pirates live off the coast of Somalia:
YouTube - The Crimson Permanent Assurance (Part 2)
So how much are we going to profit from all this? Remember when they said the taxpayer could see a profit? I'm already making a list of things to buy with my portion.
Yalt --
Which reminds me...anybody know what happened to the "Going Private" blog?
Same chick ("Equity Private") is now co-author at Dealbreaker - A Wall Street Tabloid - Business News Headlines and Financial Gossip
OK good night for real.
"Bear Stearns is Creditanstalt of our times."
If you mean their two hedge funds, Conjure and I agree with you. That's what started the ball rolling.
Average Americans are getting pissed about these bailouts. Why? Because they own mortgages and to get some type of mortgage work out they have to pay some exhorbitant fee that increases the amount they own by something like 10-15%.
Q: What's the difference between Citi and the Somali pirates?
A: Citi operates on land
Sweet, now I own even more houses. If only I got to live in one of them instead of this dinky apartment.
"The Baseline Scenario doesn't like it."
And that, my friends, is the only twisted hope in all this mess. They are simply not smart enough to rob the store without knocking over the kerosene lamp and dropping their cigars on the way out.
I'd like to ask everyone to forgive me. I voted for Bush twice. Here is my video apology...
I'm sorry...I voted for Bush, twice
I tried to tell you people that they were traitors.
Q: What's the difference between Citi and the Somali pirates?
A: The Somali pirates are profitable.
Q: What's the difference between Citi and the Somali pirates?
A: Lots of zeros.
Two more years to tax increases from Oboingo, I kinda am starting to like this guy. He figured out how to play the game, and quite quickly I might add.
Well, thank you president Obama, for understanding that some are truly more equal than others.
Can I buy this dinner??
Soon it is time to short Google
Dude, you missed that train at 700.
What a f**king joke that was.
Cheers,
prat
comrade crabsofsteel writes:
In the Sunday NY Times articles, they mentioned that the assets were being at marked at "between 21 and 41 cents on the dollar". That is starting to sound reasonable.
In all seriousness, how can anyone have any idea what's reasonable if we don't get details on the assets? We know they're "loans and securities backed by residential and commercial real estate and other such assets," which is to say we know pretty much nothing. What kind of loans? Which tranches of what securities?
Conjure and I are becoming even more bearish after reviewing the details of this latest "bailout." It's a nothingburger.
This latest round from the Fed, et al, is nowhere near what Citi needs to stay in business. It sends a bad message. It raises more questions than it answers about the Fed's willingness to step in. Conjure and I are not impressed.
It raises one hell of a lot of questions about the Fed's decisiveness.
Conjure says, "Citigroup dies."
Meanwhile, Conjure and I can see no evidence that Mr. Market is impressed with the action today.
It remains to be seen if the bailout approach is better than the liquidationist approach. It certainly is against American core values. There's at least 50/50 chance that in the end, the bailout approach is at least as bad. You can capitalize an entire new banking system with $750B.
YLSP writes:
I'd like to ask everyone to forgive me. I voted for Bush twice.
hey dont worry about it
lots a people voted for bush 3 or 4 times
NP
Q: What's the difference between Citi and the Somali pirates?
A: US Government backing.
mp - any idea what this will do to the common?
CITI ANNOUNCES MERGER: CITIGROUP IS PLEASED TO ANNOUNCE A MERGER WITH SOMALI PIRATES INC. THE PARTNERSHIP BRINGS TOGETHER THE MASSIVE HOSTAGE PORTFOLIO OF CIT WITH THE SUPERIOR NEGOTIATING CAPABILITIES OF SOMALI PIRATES INC. THE NEWLY FORMED CITIPIRATEGROUP INTERNATIONAL HAS ALREADY ACHIEVED A $50 BILLION PROFIT IN THE RANSOM DIVISION, WITH A $300 BILLION POTENTIAL FOR 2009.
I voted for Bush once.
Credit Anstalt was the bank that failed in Austria that was sort of the lighting of the fuse that caused GD1
Dirk | Homepage | 11.24.08 - 1:20 am | #
Okay, thanks. So you are saying that letting Lehman go BK lit the fuse.
Certainly the past two months have not been kind to the financials.
But I'm still working on whether we're actually headed to GD2.
Q: What's the difference between Citi and the Somali pirates?
A: The pirates take your money, while Citi takes your money, your children's money, your future grandchildren's money, ...
Q: What's the difference between Citi and the Somali pirates?
A: Citi swaps credit defaults,
the pirates swap cash for ships
(they have a better business model)
"is nowhere near what Citi needs to stay in business."
If they value all the toxic assets at par, it's at least a $150B gift.
Q: What's the difference between Citi and the Somali pirates?
The pirates have real assets?
Anthony Scalia writes:
I voted for Bush once.
yeah but your vote counted for about 30 millio
Same chick ("Equity Private") is now co-author at http://dealbreaker.com/
Thanks, Nemo, I didn't realize she was there. Shame she couldn't see "Spiral" through to its end but I can't imagine how she could have followed up....
I'm out of here for the night too...too much liquidity and not enough pizza, I'm afraid.
Q: What's the difference between Citi and the Somali pirates?
A: Viagra
Meanwhile, Conjure and I can see no evidence that Mr. Market is impressed with the action today.
Futures are up?
"mp - any idea what this will do to the common?"
I can see a lot of bottom feeders buying the stock early after having read only the headlines.
I can also see a possible run-up, only to have the smart money rip the smile off their faces.
Particularly after it's revealed that they need even more money.
This whole thing is ridiculous.
So what happens to Glodman, BAC, et al...they are left hanging in the wind.
waitinginPNW writes:
I think that if Americans really understood the basics of what has gone on here, and how it affects every aspect of their lives -to their detriment- they'd go Christ-like on their a$$es pretty quick.
Education is needed.
Completely agree.
More critical thinking needs to be taught as well.
We can start by questioning how banks can lend money that they don't even have.
Not good. Deflation is not going to be solved by capricious lending of more credit! This game of collusion is well beyond treason at this point!
"Futures are up?"
Sure, futures are up. Big deal. Volatility is also at an all-time high.
That opening bounce could burn up in about 45 seconds.
You guys need to check out the graphic on this Economist article from May 22, 2008.
Best Balance Sheets
Tell me we are not royally screwed.
Oh, it's not the end of the world, just the end of the dollar.
In a manner of speaking, the end of the dollar is the end of the world... as we know it. The dollar is the great shining beacon of fiat; if it fails, they're all going down.
Can you imagine global trade on the barter system?
Whats everyones take on Obama's stimulus? 700 billion is being thrown around, thats what maybe 2k per person. How is that going to help?
For someone chanting change all I keep envisioning is more of the same.
Q: What's the difference between Citi and the Somali pirates?
The pirates bury their gold.
Citi squanders all of theirs.
Q: What's the difference between Citi and the Somali pirates?
A:The pirates sail on level seas. C has sales on Level 3.
Kona, I'd think more credit (or more dollars in circulation) is exactly what is needed to escape deflation. Giving money to Citi so they can park it in their reserves at the Fed hardly qualifies, though.
"Can you imagine global trade on the barter system?"
Good point; I can. It might start with the Saudi's buying $3.5B in gold.
I think you short C at your peril right now, but give it a shot. Would not be suprised to see it close above $10 today.
I think this is designed to break the fear cycle, specifically staying away from AIG style equity takeover. If that is the modus operandi, the trade is short the stock, long the debt. The shorts need to hit a wall where they realize the institution and the forces protecting it are bigger than they are.
8% equity capital is pretty cheap, esp for eliminating the solvency risks. Especially considering what you can get in the market as a bank.
I have no love for Citi. But the time to deal with them was before this crisis when they were funding everyone's junk loans.
The lack of an auto bailout is about breaking the UAW - that's it.
Lower wages for the serfs.
Obama's plans, outlined by his transition team on television talk shows, could put aside his campaign pledge to repeal a Bush tax cut for the wealthy. With the downturn in the economy, those tax cuts may remain in place until they are scheduled to die in 2011, said William M. Daley, an economic adviser. "That looks more likely than not," he said.
This is gonna be awful - back up Citi for $300 Billion and then get TARP rolling and add confusion to chaos...
Lurker, it's hard to comment on the stimulus plan when it doesn't even exist yet. I see you've already decided Obama is a failure, though. Couldn't even wait for inauguration day?
"if Americans really understood the basics"
Paulson (Jim Jones) et al gets away with it by effectively saying (to the Peoples Temple cult members) "It's bad and we gotta do it or else."
Can you imagine global trade on the barter system?
With programs calculating the value of an hour of lawn mowing relative to an ear of corn, based on billions of daily transactions inputted, yes.
The gov is trying to get away cheap by underfunding C and hoping the bazooka of further potential bailouts will be enough (Paulson doesn't give up on his ideas easily), but it probably won't work. And next week will star BAC/CFC/MER with a stock price of 11.5 and Pfd yields of 15%.
Q: whats the difference between citi and the somali pirates
A: somali pirates hold ships for ransom
citi holds the country for ransom
Q: What's the difference between Citi and the Somali pirates?
A: Citi assets are set for sale to TARP. Somali pirates use tarps as sails.
Q: What's the difference between Citi and the Somali pirates?
A: The pirates are realistic about the value of the cargo in the hold.
I don't see Obama as a failure, I just don't see how Government can stop this.
The best they can hope is to ease the burn, but I don't see how throwing money at people and saying spend is a good solution.
Q: What's the difference between Citi and the Somali pirates?
A: Effective risk management
"8% equity capital is pretty cheap, esp for eliminating the solvency risks."
Please. The cash and guarantees Citi got today don't even come close to eliminating the solvency risk.
Brock,
Nine, nine, nine,
Re: more credit (or more dollars in circulation) is exactly what is needed to escape deflation
NO, no, no! This entire systemic collapse is related to what you have heard to as a tsunami of cheap and easy credit -- thus, if you think about this, there was too much money in the system linked to credit, thus what did that cause, it caused deflation, so what is the plan .... the plan they have is to toss more fucking credit at the tsunami -- are these people fucking stupid or what?
Q: whats the difference between citi and somali pirates
A: in their country the pirates are heros
Q: What's the difference between Citi and the Somali pirates?
A: The Somali pirates admit they are pirates.
I'll tell you what Conjure and I foresee. As soon as the smart money figures out what happened today--and it won't take them long--we see a run on Citigroup deposits, beginning overseas. Repeating, overseas.
Once the big domestic deposits get wind of the overseas run, they'll bail as well.
Citigroup. Dead.
Q: What's the difference between Citi and the Somali pirates?
A: About 196 years.
All great wealth begins with a great crime. The pirates will be the future bankers of Africa once all of the western world banks collapse.
Citibank is a major international bank, founded in 1812 as the City Bank of New York, later First National City Bank of New York. Citibank is now the consumer banking arm of financial services giant Citigroup, one of the largest companies in the world. As of March 2007, it is the largest bank in the United States by holdings.[1]
Q: What's the difference between Citi and the Somali pirates?
A:One party actually has something of value.
Q: What's the difference between Citi and the Somali pirates?
A: It stops hurting when the pirates leave.
mp,
I'm with yah on that man and this is God awful stuff!
Hi Lurker, I overreacted a bit to your post. I have my doubts about whether a stimulus will work too, but I guess we will have to try it. I think the total effect will be greater than the $700B if the dollars change hands a few times, if I understand it correctly. That's the motivation for spending on projects rather than just cutting checks to people. If the recipients just put it in the bank then there's no multiplier effect.
mp and conjure are right. Foreign depositors aren't stupid. Bailouts will stop at the borders. There is a distinct albeit small chance this could trigger a global lockup of funds transfers. Dangerous waters for such a small potential payoff.
Citigroup's large uninsured deposit base will see today's action on the part of the Fed, et al, as WEAK and INDECISIVE.
The big money knows how much it's going to take to keep them in business and today's action was not enough.
Repeating, not enough.
Citigroup. Dead.
mp | 11.24.08 - 1:58 am | #
If you're right, I don't think it will take very long before we join them.
Financial anarchy will become social anarchy in rather short order.
The Fed Is Out of Ammunition
The Fed Is Out of Ammunition - WSJ.com
With an estimated $4 trillion in housing wealth and $9 trillion in stock-market wealth destroyed so far in the United States, there is little doubt that we are witnessing a classic debt-deflation bust at work, characterized by falling prices, frozen credit markets and plummeting asset values.
In the U.S., the Fed can only control the supply of money; it cannot control the velocity of money or the rate at which it turns over. The dramatic collapse in securitization over the past 18 months reflects the continuing collapse in velocity as financial engineering goes into reverse.
True, this will change one day. But for now, the issuance of nonagency mortgage-backed securities (MBS) in America has plunged by 98% year-on-year to a monthly average of $0.82 billion in the past four months, down from a peak of $136 billion in June 2006. There has been no new issuance in commercial MBS since July. This collapse in securitization is intensely deflationary.
Were they afraid of "spooking the sheep" by naming a realistic figure?
Q: What's the difference between Citi and the Somali pirates?
A: Somali pirates don't call themselves 'banks'.
Brock,
No problem, did read it as overreacting.
I agree that we will just have to wait and see, but I feel given the consumers downturn in spending, unemployment rising, and general fear will cause them to just hold it, I know I will with my cut.
"Were they afraid of "spooking the sheep" by naming a realistic figure?"
Don't forget, Washington has shut down for the holidays. All of the big guns in Congress have gone home. You can't get them together in one room.
Pretend you're either Ben or Hank. You want to go on the hook for at least $500 billion without the US Congress behind you?
I don't think so.
err make that didn't read it as overreacting
"In the U.S., the Fed can only control the supply of money"
Really? This would be the same control that's led to exponential growth in M2 and M3?
Short term Treasuries have zero value, they have no monetary value, they have no time value, does that ring a bell for anyone?
Comrade Bear-
The Thais bartered rice for oil from Iran last month, speaking of global barter.
honey, look! all the water on the beach is going out to sea, lets see how far we can walk out to collect cool sea shells.
The big money knows how much it's going to take to keep them in business and today's action was not enough.
Not only that, there's precedent. Witness the looting by LEH (Germany, UK) in the hours before collapse. Witness the freezing of AIG assets throughout Asia when the bank runs began.
Citi better have a damn good global pr firm. The Bush administration ain't gonna cut it.
This whole thing sets a bad precedent. It smells. There was no plan. They pulled this thing out of their asses the same way they pulled out the TARP.
They're hoping this will tide Citi over till Congress comes back to town.
Meanwhile, everybody now KNOWS that Citi is about to go down, and they have a good idea of why.
The big money is going to start pulling out.
How long before we get Obama out there in a Chip Diller moment crying "All is well! Remain calm!"?
"Witness the looting by LEH (Germany, UK) in the hours before collapse. Witness the freezing of AIG assets throughout Asia when the bank runs began."
Exactly. The fun has yet to begin.
This might be old-hat to many of you, but put a smile on my face (or was that a grimace?):
Bernanke: I underestimated housing problem - Economy at a Crossroads- msnbc.com
WASHINGTON - Federal Reserve Chairman Ben Bernanke acknowledges he was wrong in believing that there would be limited fallout to financial markets from risky mortgages that soured after the housing market's collapse.
Translation: "Oops, my bad..."
If we keep giving out all these good analyses how is the Citi stock going to be able to open tomorrow?
Re: "lets see how far we can walk out to collect cool sea shells."
... Come on, let's run!
Yeah, I want my dead cat bounce, dammit!
sAG: excellent tsunami analogy.
Did anyone watch the CNBC special tonight? It was hilarious the way they had to keep reminding us they weren't trying to start a run on the bank, and that deposits are insured. Oh, except for that huge chunk of overseas deposits...
Dawg, if that piece of crap hits $10, I just might violate a long-standing rule of mine and short the hell out of it.
Q: What's the difference between Citi and the Somali pirates?
A: Liquid assets.
HARM,
I saw that too. You have to laugh. When a bunch of jackass tech geeks and small business types can spot a huge financial problem and talk about it ad nauseam on teh internets, it can't be that tough to figure out. I know the dictum is to never attribute to malice what can be explained by stupidity, but still...
I suspect malice.
Hope patrick.net is still treating you well.
Cheers,
prat
mp writes:
Dawg, if that piece of crap hits $10, I just might violate a long-standing rule of mine and short the hell out of it.
I got a feeling the number of traders who will get their orders filled profitably is already typed up and already at the trading desk. No soup for us.
mp-
One of the things I've enjoyed about your comments over the past few years has been your ability to access and relate the behavioral aspects of various layers within the hierarchy of the owners of financial instruments.
Eventually, all the layers behave in a similar way, it's just the difference in terms of time that makes for a full account of history.
Thanks again for your input.
The nation's weak banking system was again swept by crises, with widespread closings hitting Atlantic City, New Orleans, Chicago, Detroit, Akron, Dayton, Cleveland, and Indianapolis. However, stocks were now in "strong" hands, of investors who had bought for the long term. Crisis news now brought only brief declines followed by quick recoveries. Actually, there wasn't much further the market could fall.
?
Congress acted quickly, enacting authorization for the Controller of the Currency, with the Treasury Secretary's approval, to aid failing and temporarily embarrassed National Banks. But state banking systems began to crumble.
?
Bank holidays and/or limitations on withdrawals were imposed in 32 states. By Inauguration Day on March 4, approximately 3,000 of the nation's 18,000 banks were operating under some form of restriction. The day after, the remaining states joined the bank holiday.
Currency in circulation surged towards $7 billion, as banking facilities disappeared. Dollar transactions were suspended in London, Paris, and other world financial centers. The N.Y. Times business index dropped like a stone to new lows. Detroit, in its fourth week without banks, saw a 60% decline in retail trade. Auto production dropped to 10,633 per week.
Q: Whats the difference between Citi and the Pirates?
A: Eventually, the Pirates LEAVE.
These sociopaths are determined to bring the whole country down with them. Like a homicidal / suicidal psycotic.
This is a fine example of deflation:
Currency in circulation surged towards $7 billion, as banking facilities disappeared.
hong konger
it may be that you are complimenting MP for his friend, conjures, hard work, and then you know MP just takes the credit
Thanks again for your input.
hong konger | 11.24.08 - 2:20 am | #
~~~~~~~~
i second that mp!
ok, i'm done packing. 6am flight tomorrow for camping trip in the florida keys for a bit. aaarr! good luck on the plundering ya'll.
Back in the late 90's I lost my job and had a 4,000.00 balance on a citi credit card which I defaulted on. It's been long since paid, but for a year their lawyers made my life hell. So here are representatives go... I defaulted and got screwed, they defaulted and my tax dollars keep them in business.
Wake up people, these are our tax dollars!
Dollars in circulation were now expanding rapidly. In the year before the end of August, 1931, dollar circulation increased by about 25% ($1,106,338,000). This demand for greenbacks was the result of growing distrust of banks and the loss of banking facilities due to the many bank failures.
This trend would increase spectacularly as the financial crisis deepened. It also proved that the amount of dollars in circulation - which had declined sharply in the first year of the Great Depression - was totally dependent on the demand for currency and was not in any way limited during the Great Depression by Federal Reserve policy.
The great increase in currency in circulation continued in response to the high rate of bank failures, and credit continued to collapse. There was plenty of money around. Two U.S. Treasury issues totaling $1.1 billion at 3% were quickly oversubscribed.
serf Alan Greenspend...good camping to ya
Why do the fed/treasury/gov not have people as smart as some here on their payroll? kudos to mp, cr etc.
Q: What's the difference between Citi and the Somali pirates?
A: Drunk Citi executives tell people they're Somali pirates so they don't get kicked out of NYC bars.
Why do the fed/treasury/gov not have people as smart as some here on their payroll?
I suspect that they do,...they just ignore them.
Why do the fed/treasury/gov not have people as smart as some here on their payroll? kudos to mp, cr etc.
"It is difficult to get a man to understand something when his salary depends upon his not understanding it."
- Upton Sinclair
"All of us are ignorant, if not misinformed, on vast numbers of things. What makes experts different is that they dare not admit it. That is also what makes experts dangerous."
- Thomas Sowell
Cheers,
prat
All, thanks for the kind thoughts.
Uncle Ar, the Fed would never hire Conjure or me, particularly Conjure.
He looks strange and does not play well with others.
They're going to have to dig up John Houseman and make some "Weekend at Bernie's"-style TV ads. That'll win back the public's trust.
Important element of the deal and effect on stock market is discussed below:
MarketWarnings: credit crisis and C citibank Stock Deal Reached
He looks strange and does not play well with others.
And he steals their women. Tsk.
"At Smith Barney, we lose money the old fashioned way...we buuurrrnnn it."
If you're already poor, your risk is quite low.
That's what my advisor is recommending.
Hey Hong Konger, how are things in HK now?
Are people whigging out there or is it pretty calm?
ot
extraordinary video of very large meteor streaking across the sky tonight in saskatchewan and exploding near the ground
Breitbart.tv » Huge Meteorite Stuns Witnesses as Fireball Plunges to Earth in Western Canada
ahh, the symbolism...
Take a look at page 13 of this Friedman, Billings report under "Total Capital Requirements". Be sure you're sitting down when you read it.
Citi need $160 billion. Now. Take a look at the other big banks. Have a good cry.
http://online.wsj.com/public/resources/media/Financial_Strategy-20081119.pdf
Citibank longs on the Yahoo financial message boards are partying like they just hit the jackpot:
Yahoo! Message Boards - Citigroup, Inc. - No dilution, warrants excercisable 10.61
"ASSETS GUARANTEED> If we don't hit $10 then no dilution but assets still backed!....sooo great "
It has been yet another long day.
Good Luck to all of you.
If you don't believe in luck, have a nice day, evening, whatever.
Rode to airport with a West African cab driver. Told him that soon there was going to be a single world currency, based on constantly updated internet price data for all traded goods.
He got very excited and said "Good! When are they going to do this?"
Had to admit I only just thought of it.
Night mp, thanks for the info
Thanks for the link mp.
No one has brought up uncle JPM and his $90,000,000,000,000 derivative exposure (Treasury figures) in a bit.
yogi, what if neither I nor the hooker has a laptop with us at the time? How do we fix a price?
Citigroup. Dead.
That's a given, agreed.
My far bigger concern is what happens if more bailout isn't forthcoming and there is a "temporary freeze" on "redemptions". Hard to see how that doesn't mark - well and truly - the Lights Out moment.
# We will work to support a healthy resumption of credit flows to households and businesses.
We will exercise prudent stewardship of taxpayer resources.
We will carefully circumscribe the involvement of government in the financial sector.
We will bolster the efforts of financial institutions to attract private capital.
We will make sure that the no member of the over-class will be punished for this fiasco.
Two levels of justice. One for the rich and one for all of us.
UBS Clients Seek Amnesty on U.S. Taxes - WSJ.com
Your biological laptop will suffice until you can locate some circuits.
Gibbon1, another one I can't get out of my head is:
We will serve up the good parts on a platter to Goldman Sachs, and stick the taxpayer with the rest
I hope I am just being too cynical.
You can suggest yesterdays dollars but she may want to see some inflation.
All of the soon to be out-of-work bankers may well turn to prostitution. You have to watch out because many of them are probably experts on stale pricing arbitrage. I don't want to get taken by some sharpie.
I usually get to the blog after the missus has retired. These sorts of dark but realistic thoughts upset her. I've been going to cash since May 2007 and still not all there but what is left in the IRA is very long term need holdings in diversified
mutual funds and not much of that.
As Ethan Allen, a true patriot in the times that tried men's 9and women"s souls) may I suggest that it will be a very fearsome holiday season in the Hamptons, along apartment row in NY, in what's left of Wall Street,in Fleet Street, and elsewhere in financialdom. Both personally and corporately.
nuf said.
"How long before we get Obama out there in a Chip Diller moment crying 'All is well! Remain calm!'?"
Could be a while - Obama has been talking about the how America is facing a crisis matched only by those of a century ago, starting with his acceptance speech - 'the worst financial crisis in a century.' Transcript: 'This is your victory,' says Obama - CNN.com
But why bother paying attention to what he actually says, while also saying that you will at least give him a chance to be inaugurated before making any comments about his performance.
As for Obama making any real difference to what is happening - not a chance. But let's not veer into uninformed ridicule which is clearly contradicted by Obama's own words, seemingly backed by the same style of analysis that led him to oppose the Iraq war consistently. That is, Obama actually seems to understand that we are facing grave problems, using judgments based on facts and experience.
I realize that after 8 years (I'm open to the idea of 16 years, too), it has gotten hard to recognize what an adult understanding of the world looks like, but then, someone has to start acting like one. The play room is starting to stink from all the unchanged diapers.
must fly to Minn. later.
PNW-
I'm retired to the hinterlands of Georgia. "hong konger" is just a funny phrase I picked up when I got tired of "pie inflation" and "moo goo" before that.
Sorry if misleading. It would be more respectful of the other commenters if I just stuck with one tag for continuity's sake, but, so many funny things get thrown out here, I just pick'em up as an homage to my funny bone at the risk to my credibility.
(whatever that could possibly be worth on an anonymous board hosted by an anonymous blogger)
Europe up, at least initially...FTSE 2.11%, DAX 1.66%...
Hmmm, well I guess getting drunk in LKF and ranting 'bout Citi being insolvent last week will seem prescient to the poor HK bankers. The brits in suits sure seemed confused 'cuz I was laughing about it.
Thanks you CR and mp for letting my drunken antics be helpful to someone.
I just didn't realize that $500M of unsecured Citi deposits were in Asia at the time. Certainly had no idea there would be an attempted bailout either. Their credit cards sure are popular, though.
Bof A will be next ...
Nemo asks - 'If I despise unions and I also despise banks, what does that make me?' - despicable? (think Sylvester the cat)
We will work to support a healthy resumption of credit flows to households...
But, I don't want no stinkin' credit flow. I want to keep the cash in my pocket and save it.
Gypsies, tramps and thieves...every one of them.
It may not be a popular view, but I stand by it: If these jerks ran their firms into the dirt, we should hand them shovels to dig their graves, not cash.
joeblo, which is your favorite LKF haunt? Not that I get out much....
BTW, on London Banker's blog comment section was mentioned that 64% of Citi's deposit base is international.
As you know the local gov't has issued blanket insurance to HK depositors, and I suppose that means those of Citi as well, but if it comes to that it would make for an interesting test.
Futures now down 1%... I think they spiked up to 1%...
I cannot fathom the dollar strength, one would think that all that deleveraging and hedge fund redemptions would be over by now.
Also on WSJ
Builders Make Plea for Federal Aid
The builders' lobby is ramping up its sales pitch for a $250 billion stimulus package called "Fix Housing First," arguing that financial markets won't recover until home prices stop falling. They are calling for a generous tax credit for home purchases and a federal subsidy that would lower a homeowner's mortgage rate.
Builders Make Plea for Federal Aid
~~~
Yep, that's what we need, more houses ...
They'll be back at trough soon enouggh. Next
I cannot fathom the dollar strength...
Lots of dollar-denominated debts need settling around the world. And if people are starting to think about preserving relative wealth rather than absolute wealth, it does make some kind of sense.
I think.
Time to start shorting this little banana republic across the board.
A quick tour of retail in Los Angeles
Malls are running on empty - Los Angeles Times