Bank Collapse Watch: CitiGroup

Citigroup May Get Government Rescue, Investors Say (Update1)

Nov. 21 (Bloomberg) — 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.”

While Citigroup executives say the company has adequate capital and liquidity to ride out the crisis, its tumbling share price may shake the confidence of creditors, clients and rating agencies. A similar scenario played out at Lehman, when Chief Executive Officer Richard Fuld declared the firm was “on the right track” five days before the firm went bankrupt.

“The market may be implying some sort of regulatory intervention,” Jason Goldberg, a former Lehman analyst who now works at Barclays Capital in New York, wrote in a note to clients today. “In situations where the government has stepped in, the equity holders have not fared well.”

Emphasis added by me.

Astute readers will notice that with this post, I have “upgraded” CitiGroup from Chronicles of Depression 2.0 to actual Bank Collapse Watch.

On Friday (yesterday), a commentator on CNBC said “CitiGroup is a penny stock.” He said he never thought he’d say such a thing in his life. Hey, what did I warn everyone about earlier this year? It’s all coming to pass now.

Get the big picture. Read The Dimensions Of Our Doom.

Previous CitiGroup posts here (earliest to recent order):

Masters Of Greed Enslaved By Greed — January 12
It’s Sunset In America — January 14
What, You Thought It Was Over? — January 30
CitiGroup Is Sinking — March 4
Chronicles Of Depression 2.0: #016 — April 3
Chronicles Of Depression 2.0: #020 — April 8
Chronicles Of Depression 2.0: #024 — April 11
Chronicles Of Depression 2.0: #027 — April 13
Chronicles Of Depression 2.0: #039 — April 18
Chronicles Of Depression 2.0: #074 — April 30
Chronicles Of Depression 2.0: #080 — May 1
Chronicles Of Depression 2.0: #085 — May 6
No Wonder CitiGroup Is In Deep Shit — May 15
Finally! The CitiGroup Layoffs Begin! — June 23
Chronicles Of Depression 2.0: #141 — July 6
Chronicles Of Depression 2.0: #154 — July 14
Chronicles Of Depression 2.0: #159 — July 16
Chronicles Of Depression 2.0: #160 — July 18
Chronicles Of Depression 2.0: #161 — July 18
Chronicles Of Depression 2.0: #164 — July 20
Chronicles Of Depression 2.0: #170 — July 29
Chronicles Of Depression 2.0: #184 — August 4
Chronicles Of Depression 2.0: #213 — September 17
Chronicles Of Depression 2.0: #223: CitiGroup Blinks — September 23
Chronicles Of Depression 2.0: #255: Jackals — September 27
Chronicles Of Depression 2.0: #328: Endgame — October 12
Chronicles Of Depression 2.0: #342: CitiGroup — October 16
Chronicles Of Depression 2.0: #362: CitiGroup 2 — October 29
Chronicles Of Depression 2.0: #412: CitiGroup 3 — November 14
Chronicles Of Depression 2.0: #415: CitiGroup 4 — November 17
Chronicles Of Depression 2.0: #422: Cow Chips — November 19
Chronicles Of Depression 2.0: #424: $1T MOAR! — November 20

Explore posts in the same categories: Bank Collapse Watch, C.O.A.T. - Belief, C.O.A.T. - Money, C.O.A.T. - Politics, C.O.A.T. - Scams, C.O.A.T. - Self-Defense, Depression 2.0

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