Citi Death Watch Thread

[Swing low, sweet chariot. Comin' for to carry me home.]

the only way i could support a bailout of any of these companies is if there were no golden parachutes and the payscale of the company was set so the top executives only got 90k a year

but since that is not happening, what are you going to do, stand in a soup line wearing a Tshirt listing your principles?

here is great and sobering interview:

http://www.cnbc.com/id/15840232?video=937772691&play=1

My uncle is a medical doctor (a specialist).  If a patient he treated suffered extreme adverse consequences as a result of his treatment, he would be sued, or worse.

My father in law is a civil engineer, and if a building he designed collapsed, as Citibank has (except for repeatedly being propped up by the feds), he'd be sued, and probably lose his license.

So, why haven't the execs at Citi, and the other financial institutions lost their jobs?

Ever hear of of "moral hazard"? 

It should apply to executives as well as shareholders.

to say these firms are failing because of poor management is very subjective.  We're facing systemic failures, not individual failures.  And there may be unsatisfactory job performance at many levels down to the janitors, but we don't have time to examine each case in order to assign blame; rather, we have to attempt to save the system so that tens of millions of innocent people are forced to stand in food lines and live under bridges.

[Beet]

the only way i could support a bailout of any of these companies is if there were no golden parachutes and the payscale of the company was set so the top executives only got 90k a year

but since that is not happening, what are you going to do, stand in a soup line wearing a Tshirt listing your principles?

here is great and sobering interview:

http://www.cnbc.com/id/15840232?video=937772691&play=1

My uncle is a medical doctor (a specialist).  If a patient he treated suffered extreme adverse consequences as a result of his treatment, he would be sued, or worse.

My father in law is a civil engineer, and if a building he designed collapsed, as Citibank has (except for repeatedly being propped up by the feds), he'd be sued, and probably lose his license.

So, why haven't the execs at Citi, and the other financial institutions lost their jobs?

Ever hear of of "moral hazard"? 

It should apply to executives as well as shareholders.

to say these firms are failing because of poor management is very subjective.  We're facing systemic failures, not individual failures.  And there may be unsatisfactory job performance at many levels down to the janitors, but we don't have time to examine each case in order to assign blame; rather, we have to attempt to save the system so that tens of millions of innocent people are forced to stand in food lines and live under bridges.

The janitors didn't cause this crisis.

[CARLHAYDEN]

the only way i could support a bailout of any of these companies is if there were no golden parachutes and the payscale of the company was set so the top executives only got 90k a year

but since that is not happening, what are you going to do, stand in a soup line wearing a Tshirt listing your principles?

here is great and sobering interview:

http://www.cnbc.com/id/15840232?video=937772691&play=1

My uncle is a medical doctor (a specialist).  If a patient he treated suffered extreme adverse consequences as a result of his treatment, he would be sued, or worse.

My father in law is a civil engineer, and if a building he designed collapsed, as Citibank has (except for repeatedly being propped up by the feds), he'd be sued, and probably lose his license.

So, why haven't the execs at Citi, and the other financial institutions lost their jobs?

Ever hear of of "moral hazard"? 

It should apply to executives as well as shareholders.

to say these firms are failing because of poor management is very subjective.  We're facing systemic failures, not individual failures.  And there may be unsatisfactory job performance at many levels down to the janitors, but we don't have time to examine each case in order to assign blame; rather, we have to attempt to save the system so that tens of millions of innocent people are forced to stand in food lines and live under bridges.

Sorry, but this wasn't a meteor that hit Wall Street.  The very, very, very stupid decisions of top management brought on the problem. 

You are sounding more and more like a liberal.  Those responsible should not merely be blamed, but punished.  We cannot save something if we continue to allow the practices which caused the problem to continue.

[Swing low, sweet chariot. Comin' for to carry me home.]

to say these firms are failing because of poor management is very subjective.  We're facing systemic failures, not individual failures.  And there may be unsatisfactory job performance at many levels down to the janitors, but we don't have time to examine each case in order to assign blame; rather, we have to attempt to save the system so that tens of millions of innocent people are forced to stand in food lines and live under bridges.

Sorry, but this wasn't a meteor that hit Wall Street.  The very, very, very stupid decisions of top management brought on the problem. 

You are sounding more and more like a liberal.  Those responsible should not merely be blamed, but punished.  We cannot save something if we continue to allow the practices which caused the problem to continue.

Statement from jmfcst: "If they did a poor job they should be fired, if they broke the law they should go to trial."   There, is that good enough for the conservative jury?

But even if you could snap your fingers and get them all fired and indicted, YOU STILL HAVE A FINANCIAL CRISIS TO DEAL WITH.

The ship is sinking, blame can wait, what we have to do is save the ship.

What you're doing is complaining that we're being asked to bail water before those responsible are arrested.  And if we follow your advice, we'll still be doing investigations while we're waiting in a soup line.

You want to be a conservative?  Fine.  Then how about trying to conserve life instead of trying to conserve life-vests?

[CARLHAYDEN]

to say these firms are failing because of poor management is very subjective.  We're facing systemic failures, not individual failures.  And there may be unsatisfactory job performance at many levels down to the janitors, but we don't have time to examine each case in order to assign blame; rather, we have to attempt to save the system so that tens of millions of innocent people are forced to stand in food lines and live under bridges.

Sorry, but this wasn't a meteor that hit Wall Street.  The very, very, very stupid decisions of top management brought on the problem. 

You are sounding more and more like a liberal.  Those responsible should not merely be blamed, but punished.  We cannot save something if we continue to allow the practices which caused the problem to continue.

Statement from jmfcst: "If they did a poor job they should be fired, if they broke the law they should go to trial."   There, is that good enough for the conservative jury?

But even if you could snap your fingers and get them all fired and indicted, YOU STILL HAVE A FINANCIAL CRISIS TO DEAL WITH.

The ship is sinking, blame can wait, what we have to do is save the ship.

What you're doing is complaining that we're being asked to bail water before those responsible are arrested.  And if we follow your advice, we'll still be doing investigations while we're waiting in a soup line.

You want to be a conservative?  Fine.  Then how about trying to conserve life instead of trying to conserve life-vests?

You have a complete misunderstanding of the situation.

First,  a few firms acted irresponsibly and are demanding the taxpayers bail them out.  Now, dedicated socialists maintain that it a systematic problem. 

Second, we are not on a ship which is sinking.  Now, I'll grant you that the executives at firms like Citi and Lehman and a few other firms (AIG comes to mind) are working hard to destroy their firms. 

Third, the first rule of first aid is stop the bleeding.  The executives at a number of companies are the source of the problem.  Stop them by getting rid of them.

Fourth, about eight weeks ago I noted that the wastrels, after getting their $700 billion bailout would soon be back for more.  Well, there back for even more than I expected and even sooner than I expected. 

Fifth, stop and think rather than panic.  Pouring hundreds of billions of taxpayer dollars into poorly managed firms is a waste of money.

Finally, the free enterprise system allows for both success and failure.  You appear to believe that if a company is in the financial industry and is big enough, it will not be allowed to fail no matter how stupid its policies.

[Swing low, sweet chariot. Comin' for to carry me home.]

Obviously, we disagree on the magnitude of the problem.

[CARLHAYDEN]

Obviously, we disagree on the magnitude of the problem.

That, and any possible solution.

Throwing money down a rate hole is not the solution.

What is being done is not unlike a physician simply (and soley) giving massive doses of morphine to someone with gangrene without actually treating the problem.  It may temporarily make the patient feel better, but when the drug wears off, there's been no improvement.

[MK]

Its about stopping the ship from sinking, then once its stable.. work on fixing the hole.

Its kinda like fix-a-flat.

[○∙◄☻¥tπ[╪AV┼cVê└]

Its about stopping the ship from sinking, then once its stable.. work on fixing the hole.

Its kinda like fix-a-flat.

It's like replacing their sinking raft with a gold cruise ship. Don't be too surprised when they have some more sinking rafts.

[2952-0-0]

Uncle Sam may end up owning 40% of Citibank. http://www.bloomberg.com/apps/news?pid=20601087&sid=aw5gTFLQpmC0&refer=home

I'm in a stock market contest and I put a lot into shorting this.

[Holmes]

About time. When banks got bailed out, they should've owned 100% of them until they got their act together.

[Sam Spade]

Uncle Sam may end up owning 40% of Citibank. http://www.bloomberg.com/apps/news?pid=20601087&sid=aw5gTFLQpmC0&refer=home

I'm in a stock market contest and I put a lot into shorting this.

Well, it's probably about time to take your profits, unless C manages to run up any more. (like say to $5 or so).  No need to short the hole.

I'd focus my financials shorting energy on Wells Fargo and Chase.

However, I believe the best shorting opportunities belong right now in tech.  They've been way overperforming the market the past month or so, for inexplicable reasons.

[Sam Spade]

About time. When banks got bailed out, they should've owned 100% of them until they got their act together.

You want to destroy the US government?

Unless I've been reading things wrong, there's quite a good reason why the US has not nationalized Freddie/Fannie or AIG...

[Beet]

About time. When banks got bailed out, they should've owned 100% of them until they got their act together.

The banks got a fraction bailed out. Nationalization would mean they get wholly bailed out. It would be bigger than all the other bailouts combined. And yet the same people who froth at the mouth over bailouts have been clamoring for nationalization.

People are so eager for a pound of flesh they truly don't understand what they're talking about. Just as they were more angry over the $700 billion bailout (that went through Congress) than the $1 trillion Fed borrowing that went over their heads. The government has learned their lesson- spend as much as you want, but don't go through Congress.

Sadly, I don't think many people yet realize how bad it is. George Soros has compared this current crisis to the fall of the Soviet Union.

[2952-0-0]

However, I believe the best shorting opportunities belong right now in tech.  They've been way overperforming the market the past month or so, for inexplicable reasons.

I'm not so sure. Citi and BAC must be getting crushed by a massive outflow of deposits by their wealthy customers over the $250K FDIC limit. No one wants to put their life savings in something whose stock is less than a slice of pizza. It's the same silent bank run which did Wachovia and WaMu in.

[Sam Spade]

However, I believe the best shorting opportunities belong right now in tech.  They've been way overperforming the market the past month or so, for inexplicable reasons.

I'm not so sure. Citi and BAC must be getting crushed by a massive outflow of deposits by their wealthy customers over the $250K FDIC limit. No one wants to put their life savings in something whose stock is less than a slice of pizza. It's the same silent bank run which did Wachovia and WaMu in.

Well, you are correct to a certain extent.

I'm just saying that when you've made plenty shorting from $X to $2 and both you and I know they're dead, better shorting opportunities appear.  There's not much left to gain there before it finally hits zero (unless you're holding CDS.

Which is why I suggested tech.  That's where all the money is hiding right now.

Or if you want to do financials, do Wells Fargo or Chase.  Wells Fargo is as dead as Citi and BAC, but look at the room it has to fall.  Chase isn't dead yet, but with its derivatives exposure...

[CARLHAYDEN]

Citibank,

Funded by the American taxpayer, but spends it money in Europe.

First, Spanish toll roads.

Then, French jet aircraft (subsequently cancelled)

Now, extending the American taxpayer's largess to the U.K.

http://www.dailymail.co.uk/news/worldnews/article-1152881/British-jobs-supported-American-taxpayer-U-S-government-set-buy-40-Citigroup.html

When do they get around to spending American taxpayer money in Germany, Italy, Albania?

Probably soon.

[CARLHAYDEN]

Citibank has been referred to by some commenttors as a "zombie" business.

I think it would be more accurate to refer to it as a "vampire" business which periodically sucks the lifeblood out of the American taxpayer.

[War on Want]

You know, I don't know who annoys me more: pro-bailout people or anti-bailout people.  This entire argument has become farcical and so far out that I no longer feel like I can reasonably fall on either side.

The same thing has happened to me, I am annoyed by both sides, I just want the most practical solution to happen.

[○∙◄☻¥tπ[╪AV┼cVê└]

About time. When banks got bailed out, they should've owned 100% of them until they got their act together.

The banks got a fraction bailed out. Nationalization would mean they get wholly bailed out. It would be bigger than all the other bailouts combined. And yet the same people who froth at the mouth over bailouts have been clamoring for nationalization.

Clearly.

Let them fail.

[2952-0-0]

The inevitable is being aaggoonniizziinnggllyy sslloowwllyy done:

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/27/AR2009022700019.html?hpid=topnews

[Sam Spade]

Eh, they're just making it into another zombie institution.

[CARLHAYDEN]

Eh, they're just making it into another zombie institution.

AIG and Citi are vampire institutions that keep coming back to drink the blood of the American taxpayers.

Time to get out the sharpened stakes!