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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Bank Holding Company who wrote (176791)	1/13/2009 12:54:19 PM
From: butschi2	Respond to of 306849

IMHO Citi will be nationalized at huge costs for the taxpayer until its over. To much debt and the economy going downhill doesnt help either. The losses from the economy hitting the wall are not yet realized in full only some minor losses through mark-to-market but that got suspended. Citigroup cant be allowed to fail because of $38 trillion in nominal value of derivatives. If people run from Citi, Fed/Treasury will have to pony up soon a few more $100 billions in cash/guarantee every quarter as lifeline. Look what Lehman has done to the system with only $1 trillion in nominal value, it has killed many hedge fonds, trust and many counterparties are in still in limbo. BK crushed the asset values of Lehman for their debtors due to counterparties terminating contracts in the money for Lehman and fire sales of assets left. There is no fast downsizing for a bank or life after BK. Citi($38 trillon), Bac($30+ trillon) and JPM($85+ trillon) will be centerpiece of derivatives problems and therefore if they fail it would rip the system. But rescue cost will get huge.