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View Full Version : Citigroup Blames Short Sellers For Collapse



mick silver
21st November 2008, 12:27
Citigroup Inc., which fell as much as 25 percent in New York trading today, is urging the Securities and Exchange Commission to revive a prohibition on short-selling financial stocks, according to a person familiar with the matter.

The bank has also discussed with lawmakers its proposal to reinstitute the ban on bets that share prices will fall, said the person, who declined to be identified because the discussions weren't public. Citigroup, down for eight of the past nine trading days, declined $1.22 to $5.18 on the New York Stock Exchange at 2:37 p.m.

Buffeted by four straight quarterly losses, New York-based Citigroup has raised about $75 billion since December by selling assets and equity stakes, including a $25 billion injection from the U.S. Treasury.

SEC spokesman John Nester declined to comment. Citigroup spokesman Michael Hanretta didn't return a phone call seeking comment.

No One Wants To Comment

Since no one wants to comment, I will. It's a sure sign of desperation when companies blame short sellers for company woes. Make no mistake about it, Citigroup is desperate.

Let's look at a couple of charts.

Citigroup Weekly Waterfall



click on chart for sharper image

Citigroup 60 Minute Chart



click on chart for sharper image

Citigroup fell over 20% yesterday and at one point today was down over 30%, closing off $1.69 or 26%.

Citigroup's Ridiculous Short Selling Claim

Inquiring minds are looking at Citigroup Statistics as of October 28, 2008.

http://www.howestreet.com/articles/index.php?article_id=7996

main1event
21st November 2008, 12:32
God forbid they take any responsibilty for their own actions. Nah, its impossible that they were negligent in lending to people who did not deserve mortgages or credit cards.

BTW, short interest on Citigroup is only 3%.

The goverment imposed restrictions on short selling GS, JPM and others and their stocks plummeted. Shorts are not that bad guys in this instance.

Compared to the shorts in commodities where the shorts are composed of over 50% of world production any shorts in Citigroup are angels.

research24
21st November 2008, 13:44
Whadaya expect from da Wall Street gangstas?

mick silver
21st November 2008, 13:53
They do the same **** but it OK for them to do this , Heaven help if someone else would think of this

mick silver
21st November 2008, 13:54
Credit Risk Rises on Citigroup Breakup Speculation
by Mike Shedlock












I have been saying for over a year that Citigroup would not survive in one piece. That option is looking increasingly likely as the Citigroup Board Weigh Options.

Citigroup Inc.'s board meets today to discuss the bank's options after Chief Executive Officer Vikram Pandit's efforts to rebuild investor confidence failed to halt the stock's descent to a 15-year low, a person with knowledge of the matter said.

The board, led by Chairman Win Bischoff and independent director Richard Parsons, will meet at Citigroup's headquarters in New York, said the person, who declined to be identified because the deliberations are private. The panel may choose to sell pieces of the bank or the entire company, the Wall Street Journal reported, citing unidentified people familiar with the situation. The New York Times reported that management isn't actively considering a sale or split up of the bank.

Citigroup, once the biggest U.S. bank, with a stock market value of $274 billion at the end of 2006, dropped yesterday to about $26 billion, slipping to No. 5 after Minneapolis-based U.S. Bancorp.

"Investors right now aren't convinced that we're done seeing dead bodies on the Citigroup balance sheet," said William Fitzpatrick, an equity analyst at Optique Capital Management Inc. in Milwaukee, which oversees about $1 billion and doesn't own Citigroup shares. "That's what the sell-off is, concern over more and more losses over the next couple of quarters."

Balance Sheet Blues

Concern over its balance sheet is indeed one of the issues. Credibility of Citigroup management is another issue. I discussed both yesterday in Citigroup Blames Short Sellers For Collapse and previously in Citigroup's Town Hall Meeting.

Credit Risk Rises On Breakup Speculation

Bloomberg is reporting Credit Risk Rises on Citigroup Breakup Speculation

The cost of protecting bonds sold by Wall Street banks from default rose amid speculation Citigroup Inc.'s board may consider a breakup of the company when directors meet later today.

Credit-default swaps on New York-based Citigroup jumped to a record on concern a break-up could leave debt holders with a weakened company. Contracts on other U.S. banks including Wells Fargo & Co. and Goldman Sachs Group Inc. also rose.

Citigroup directors, led by Chairman Win Bischoff, will discuss the bank's options after shares in what was once the biggest U.S. bank tumbled to a 15-year low, a person with knowledge of the matter said. The panel may choose to sell pieces of the bank or the entire company, the Wall Street Journal reported, citing unidentified people familiar with the situation.

Such scenarios imply that brokerage units Citigroup Global Markets and Smith Barney "would be peeled away from the banks," said Ricardo Kleinbaum, a credit analyst at BNP Paribas in New York. That could be triggering concerns that credit-default swaps would be left tied to a weakened entity, he said.

Credit-default swaps on New York-based Citigroup climbed 65 basis points to 465 basis points, according to CMA Datavision. The contracts on Citigroup, which analysts forecast may report its fifth-straight quarterly loss in January, has surged from 10 basis points since the start of the credit crisis last year. A basis point on a credit-default swap contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year.

Citigroup To Offer Japan's Nikko Workers Early Retirement

In related news Citigroup Said to Offer Japan's Nikko Workers Early Retirement

Citigroup Inc., which this week said it's shedding 52,000 jobs, is seeking to reduce its workforce at its Japanese brokerage unit by offering earlier retirement to some employees, two people familiar with the situation said.

Nikko Cordial Securities Inc., which employs about 7,000 in Japan, made the proposal to employees over the age of 40 in a memo from President Eiji Watanabe yesterday, the people said, declining to be identified because a public announcement hasn't been made. The offer also includes about two years of pay, the people said.

"Some talented employees may leave the firm, yet people who underperformed may stick to the company as the job market is extremely tight now,' said Makoto Haga, president of Wing Asset Management Co., a Tokyo-based hedge fund. "Citigroup cannot avoid a massive redundancy here in Japan as the global financial market is worsening further."

Citigroup Shares Hammered Again

Citigroup is down another 17% percent today after dropping 26% yesterday and 21% the day before. The new 52 week low is $3.57. Citigroup last traded at these prices in 1993.

Repeating what I said yesterday, "the market seems to believe Citigroup is insolvent and so do I". It remains to be seen if Citigroup does decide to break up and if so at what price for each piece, or if another bank can take them over completely.



http://www.safehaven.com/article-11898.htm

fredrock
21st November 2008, 14:22
This article mentions credit default swaps or CDS for short. Can someone answer these questions if I understand this correctly?

What is there to stop these rich bankers from shoveling all of their debt on to one bank at a time using these CDS and then watching the bank with the bad debts collapse?

Are they stripping these failing banks of good assets like piranhas and replacing them with bad ones thereby ripping off investors and depositors? Have they intended to do this all along? This sounds like an auto mechanic who strips an old junker for parts to keep a newer car on the road.

Does anyone else see the potential of conspiracy in all of this? Will the last super bank left standing be left with all the good debt and all of the power while Americans are left holding the bag?

I have a solution…

Fred

P.S. Before anyone posts to correct me, I see that I said that the last bank would have, "all the good debt". Yes, I know that all debt is bad.

mick silver
21st November 2008, 14:27
Who knows fred you maybe on to something , there nothing that surpise me any more . i know the game well end bad for a lot of people and i do not see the rich being in that group

Tribal Warrior
21st November 2008, 23:03
Not sure, but one thing is for sure, Hedge Fund Managers and short sellers are all grouped together, they all talk to each other and are not regulated. So yeah it doesn't surprise me anymore to see large banks failing that were once considered largest in the world. They can pick them off one at a time as long as naked short selling is allowed.

research24
22nd November 2008, 15:28
It just warms my heart to hear banksters whine. This is all a rerun of the Dr. Frankenstein story. Banksters didn't bother to read it. Their own monster is devouring them. Funny, funny, funny. Truth is stranger than fiction.

AMF: Citi, Merrill, BoA, et. al.

Ardent Listener
22nd November 2008, 18:38
It just warms my heart to hear banksters whine. This is all a rerun of the Dr. Frankenstein story. Banksters didn't bother to read it. Their own monster is devouring them. Funny, funny, funny. Truth is stranger than fiction.

AMF: Citi, Merrill, BoA, et. al.


My heart too research. On the other hand, maybe it's just the bigger banksters devouring the smaller banksters when you get down to it.
They have been known to eat their young when food is hard to come by.