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To: Bank Holding Company who wrote (186431)	2/25/2009 10:37:58 AM
From: butschi2	Respond to of 306849

C is more in trading with CDS and other derivatives and therefore has a much bigger trading book. The banks have mostly not been net seller of CDS as AIG has been. AIG didnt do trading with CDS but mostly debt insurance and therefore their losses are more calculable but will be far higher than i would expect from Citi CDS, but Citi has much more "normal" assets at risk and the other derivatives are hard to calculate and prices may swing around wildly. AIG was pulled down due to a "small" part of their non core business with huge leverage but deemd save. Citi will go to hell due to their risk taking in a part of their core business. But if assets at risk (MBS, LBO, CDO, CRE,...) pull Citi down, their trading book will explode as Lehmans derivatives mess will need a few more YEARS to sort out. With termination clauses for many counterparties no IB can survive a Ch11. The losses therefore multiply at the cost of the asset base. Thats the real danger of a $38 trillion derivatives book. Lehman hitting the wall was evenly distributed around the world with a lot of losses to many counterparties. Citi is far bigger and the counterparties are already more fragil than last September and Lehman nearly collapsed the system due to trust failing.