Friday, November 2, 2007

Hmmmm – this can’t be good ….

Citigroup calls emergency board meeting

Fears of more turmoil hitting world stock markets have grown after it emerged that Citigroup, the world's biggest bank, has called an emergency board meeting for this weekend amid concerns of escalating bad debts at the financial services giant. Citi's shares have already slumped 25pc over the past three weeks after the bank unveiled a $5.9bn (£2.8 billion) write down, which is a reduction in the value of an asset because it is overvalued compared to the market.

Posted by uncle chris @ 10:21 PM (974 views)
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8 thoughts on “Hmmmm – this can’t be good ….

  • soothing words from the financial sector moved the market back to flat in the US apparently.

    Although according to the normal ITV news at (whenever 10?) the FED ALSO pumped $41 billion in “liquidity” onto the markets after the tank yesterday. That might have had something to do with it.

    I missed that. Does anybody know what form or when that was done precisely (or if indeed it was done). Makes the sums we worry about look like small fare.

    Of course .. we are much smaller.

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  • A one off $5.9bn doesn’t sound very big on a market cap of $200bn. 2.5% loss on a dividend yield of 5.69%.

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  • I blogged this yesterday – they are in for what they say is £30 billion dollars (at least?) : – O

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  • Citi is seen as a bellwether for the health of the global financial system but has been rocked in recent days over concerns that its exposure to America’s sub prime mortgage crisis is bigger than previously thought.

    Yawwwn – why don’t they just de value the world’s housing stock and have done?

    Then we can start again…

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  • planning4acrash says:

    Its most probably lending to banks in the same way that the BOE lent to Northern Crock, tho I’m not sure whether the Fed lends at penal rate.

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  • dohousescrashinthewoods says:

    I was stunned (if not surprised) to find this gem:

    “If these revelations are true, then it seriously undermines Alistair Darling’s credibility. If the Prime Minister does not trust his own Chancellor to run the economy in a crisis, why should the country trust him?”

    Looks like Mr Brown can’t let go of the treasury and has asked his “pet” to step in and usurp Darling. “Should the country trust him?” Who is that referring to? A chancellor whose prime minister won’t let him run the economy, or a prime minister who won’t trust his staff?

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  • I’m very worried, and I think the Northern Rock issue is a storm in a teacup by comparison to the problems in the wings. Have ML really been selling CDOs to Hedge Funds on fixed deals in order to hide the reval losses? Have Citigroup really got to write of USD30bn? Same for Goldman? Same for JP? This is now heading a long way past ‘house price crash’ into global financial meltdown. Not good for anyone, I’m afraid.

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  • Why the hell aren’t the treasury seizing assets of ‘Former’ NR executives, no more bailouts. If you bet black and it comes up red, you pay! not walk away with milions while the tax payer picks up the tab. £1000 per tax paying house hold! thats more than the NHS!

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