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The Citi Slide
A sliding stock price, thousands of layoffs and dire predictions from the financial press bring the troubles of the U.S. automakers to mind.
I'd almost forgotten about the tail spin the banking sector has been in. While the fate of the Big Three was debated on Capital Hill this week the wheels were falling off the banking giant Citigroup. We thought the TARP program had provided some stability to the reeling financial markets but there are more rumblings of looming problems, especially at Citi. Today's peice in the NYT recounts the all too familiar hubris laden journey of the firm over the past five years.
It will be interesting to see what happens with Citi. Will they be sold or merge with another Wall Street titan? Better yet, will the Treasury Department decide that Citi is too big to fail? Maybe it's true when they say the first $25 billion is the hardest to come by. Brad DeLong has an interesting yet cynical outlook on what to do with Citi:
Update: This story is running on Bloomberg. Looks like Citi is too big to fail.
I'd almost forgotten about the tail spin the banking sector has been in. While the fate of the Big Three was debated on Capital Hill this week the wheels were falling off the banking giant Citigroup. We thought the TARP program had provided some stability to the reeling financial markets but there are more rumblings of looming problems, especially at Citi. Today's peice in the NYT recounts the all too familiar hubris laden journey of the firm over the past five years.
It will be interesting to see what happens with Citi. Will they be sold or merge with another Wall Street titan? Better yet, will the Treasury Department decide that Citi is too big to fail? Maybe it's true when they say the first $25 billion is the hardest to come by. Brad DeLong has an interesting yet cynical outlook on what to do with Citi:
Yep. Time to do it. Swedish model. No more of this "preferred stock capital injection" business. Common stock. And with commitment comes control.If it comes to that then surely a loan to the U.S. automakers is in order.
Update: This story is running on Bloomberg. Looks like Citi is too big to fail.
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