Wednesday, October 29, 2008

Chronicles Of Depression 2.0: #362: CitiGroup 2

Investors losing faith in Citigroup
NEW YORK ( -- What now, Citigroup?

That is the biggest question that investors are itching to have answered by the nation's fourth largest bank by deposits.

It has certainly been an interesting time for the New York City-based firm to say the least. Earlier this month, it was one of the first nine banks chosen by the Treasury Department to receive a cash injection in exchange for stock. Citigroup will receive $25 billion.

However, since Treasury made that announcement more than two weeks ago, shares of Citigroup have tumbled 15% and are trading only slightly above their 52-week low, leading many on Wall Street to wonder what Citigroup's management can do to get back in the good graces of Wall Street.

The prevailing opinion among analysts is that Citigroup is looking to do what many other banks have done lately - acquire deposits.

Emphasis added by me.

What? Acquisitions?!!?

This is what I wrote in Chronicles Of Depression 2.0: #342: CitiGroup:
as the bank sheds more than $400 billion in noncore operations, low-returning assets and toxic mortgages. Citigroup also eliminated 11,000 jobs in the third quarter, bringing the total number of layoffs to 23,000 this year,

CitiGroup has been getting rid of bits of itself -- and now Wall Street wants them to go on a buying spree?

Get this:
Citigroup should be capable of pulling off a major deal now that the banking giant has $25 billion in capital to play with.

What the hell do they mean "$25 billion to play with"?!!? That's our money -- it's supposed to be used to grant loans!
And both Morgan and Goldman are receiving $10 billion from the government, cash they could potentially use to shop for banks.

Emphasis added by me.

OK, fuck these bastards!

They've been granted our money and they're going on greed sprees with it!

It was given to them to keep them alive -- and to relieve the credit crisis!

They should be prohibited from acquiring companies. They're already under the Too Big To Fail category. How much bigger do we want these tumors to become?

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