Citigroup: Bankrupt by any other name is still bankrupt...
Rockefeller Center and Pebble Beach are one thing,
but now it's Citigroup and Merrill Lynch...
Bernanke has his back to the wall to cut .50 bp,
if not .100 bp, and that just may light the fuse
for a crack up boom in PM's.
Buggers.... I know COMEX shorts are at all time highs, just
raise those stops, buckle those chin straps, and hold
tight because...it isn't just gold:
The Jimmy Rogers Agricultural Index was up nearly 4% on Friday:
"The Big Lie" is that banks are NOT writing everything
off all at once...because they can't! They can not and will
not write off losses beyond what their capital base can bear.
These write offs will keep popping up as they line up capital
infusions to maintain solvency.
Insolvency = bankrupt.
Off balance sheet losses exceeding the capital base = Enron.
And today, we don't just have one Enron, or LTCM.
To put the headline below in perspective:
LTCM's loss in 1998 was $4.6 billion...
PS: That sound you hear? That's all the Wall Street
insiders heading for the exit as the rug is pulled out
beneath Main Street USA -- as they are being assured
there is no recession and Goldilocks is alive and well...
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Citi Could Write Down Up to $24 Billion
By Charlie Gasparino, CNBC On Air Editor | 13 Jan 2008
cnbc.com
Citigroup could write down as much as $24 billion due to subprime and credit-related losses, CNBC has learned. In addition, an estimated 20 thousand layoffs will be part of a comprehensive plan to slash costs and raise capital.
The plans will be unveiled Tuesday, when it reports fourth-quarter earnings. At the same time, Citigroup could also announce that it is cutting its dividend payment.
Citigroup Citigroup IncC
28.56 UNCH 0% NYSE
Citigroup also intends to raise as much as $15 billion from various foreign and domestic entities including Saudi Arabian Prince Alwaleed bin Talal, Citigroup's largest individual shareholder, as America's biggest bank grapples with heavy mortgage market losses.
Alwaleed has owned his Citi stake since the early 1990s and helped engineer a previous rescue plan for the bank more than a dozen years ago. According to a report on the Wall Street Journal's Web site, he is likely to keep his total stake in the bank below 5 percent to avoid regulatory scrutiny.
Merrill Lynch Merrill Lynch & Co IncMER
54.69 UNCH 0% NYSE
Merrill is seeking about $4 billion in a second capital raising. According to Financial Times, the Kuwait Investment Authority is expected to be a significant investor in the deal. A deal could be announced as soon as midweek, the FT reports.
Merrill has already begun laying off people, but layoffs will be minimal. Eight hundred people are expected to leave, with a number of employees already heading for the exits because of diappointment at the size of bonuses. Merrill's writedown is expected to be in the neighborhood of $12 billion to $15 billion as newly appointed CEO John Thain raises funds from around the world.
China In Or Out?
The Wall Street Journal reported earlier Saturday that China Development Bank (CDB) is among a few other investors to join Alwaleed for the rescue of Citigroup. But Vice Finance Minister Li Yong, who serves as a nonexecutive director of the China Investment Corp., said on Sunday that he was not aware of such a deal but that the CIC would not intervene in business decisions by the CDB, in which it owns a stake.
In November, Citi accepted $7.5 billion in new capital from the The Abu Dhabi Investment Authority only weeks after its former chief executive officer, Charles Prince, was forced out amid news of the heavy losses related to bad bets on mortgage securities and an ailing housing markets.
-- Reported by Charlie Gasparino. Written by CNBC.com staff with wire reports.
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