Citigroup Holds Talks With US Government As Shares Plummet

Citigroup Inc has begun talks with the U.S. government as its plummeting share price raises doubts about the bank's ability to survive, a person familiar with the matter said.

The bank has met with officials from the Federal Reserve and the U.S. Treasury Department in recent days to discuss its options, which include an endorsement from the government and another capital injection from the Treasury, the person said, requesting anonymity because he is not authorized to speak to the press.

Read the whole story here.

Comments

[USNVet]

Why is Citigroup being allowed to keep a $400 million dollar, 20 year contract with the NY Mets for naming rights to the new baseball stadium? Will that money come from the taxpayers? This is outright theft! See this NY Times article: http://www.nytimes.com/2008/11/22/sports/baseball/22citifield.html?ei=5070&emc=eta1

[parlormaid]

I agree with you LITU. They did the same to me. I have credit score over 800 also and had that card since 1989. never late or over limit. I paid the card in full a few days ago after they raised my rate to 21 percent. The hell with CITI. I hope they dont get any help from my tax dollars for a bailout

[mikekopac]

In response to rabid dog... i agree with you 100 percent except for the more jobs part. Name American made products that would be bought thus creating American jobs... TVs..No Computers..no..clothing...no..furinture..very little....lamps, christmas items, toys...no no no
This is and has been the FUNDAMENTAL CAUSE of the meltdown... we make no value added products..we export grain just like a subservient colonial society
I have been looking for the union label for over 30 years, buy GM cars.... if everyone thought like I do we would not be in this mess
Obama has the answer..public works and green up the economy and let not one wind turbine or blade be made overseas... let Americans return to buying cars made here, by Union workers( what is the point in holding down wages..remember Henry Fords' idea)...THIS creates workers with real money in their pockets instead of credit..... what a concept

[tomas0808]

That's a nice thought, and up till 95 I always did buy American cars but in 95 I simply couldn't afford it anymore. The constant repairs, the crummy mileage. I bought a Tercel and it's been in the shop five times in twelve years. Believe it or not Detroit could have made a car as reliable and fuel efficient as Toyota, they just CHOSE not to. They CHOSE to build cars that burned out after five years because they, like the Republican party, relied on dumb people that would continue to act against their self interest and continue to buy their cars even though they weren't very good

[rabiddog6708]

A long as the government is handing out cash, they should give some to the taxpayers. If we pay off our debt, we can go about acquiring more.....American love to spend and we don't seem to learn from our mistakes (explains Bush's 2nd term), so millions will spend, giving a much needed boost to a crippled economy....spending leads to more production, which leads to more jobs. It is a win win situation.

[Whale]

What's the big deal? So their stock is down. The question should be is the bank solvent and well capitalized. If the stock goes down, the only folks to suffer are the stockholders who contribute nothing to the capital or soundness of the bank, they only suck money out.

[LITU]

There should no longer be any doubt that disaster capitalism is upon us in full force. If Congress truly wanted to bail out the economy, it would make it possible for people to have more money to spend commercially by legislating a serious reduction in credit card interest rates.

Citi now charges 14.99 percent on standard purchases. Without doing the hard math, that represents about a 13 percent profit for Citi.

Why does Congress hate America so much?

[LITU]

I have an 816 credit score; have had a credit balance on my Citi account for months, and the b@$ t@rds had the audacity to send me a Change in Terms notice, virtually doubling my interest rate on standard purchases.

I called them and cancelled my account. They let me know the check would be in the mail. Uh-huh!

Flush 'em down the toilet as far as I'm concerned.

[Earl]

Send the COT letter to your congressperson with the interest increase info circled.

[mikekopac]

I have a question that perhaps could be answered by some one...

In what form was the 25 billion that the US governement just put into Citi ? Loan? bought stocks? gift?

Now if it is only worth 20 billion...who took the other 5?

Now if the Saudi's are right and it is undervalued...what stops investors from buying now, government puts in money, stock goes up (even just twofold).... investors withdraw money, and we have just given a windfall to them instead of helping the institution?

I have no backround in econimics and would appreciate if those of you that do help me try to understan this...Thnx

[Earl]

So the government gives my money to Citibank, and then Citibank still sends me my monthly credit card invoice without a balance reduction? I've got a better idea. I think the government should give me my money back and let Citibank sink or swim on its own.

[partyofone]

"The Politics of Fear" gave us the Iraq War and a trillion dollars paid by taxpayers to defense contractors on the argument that without that expenditure America would be attacked by terrorists with atomic weapons. Americans are wiser now.

So the new "Politics of Fear" is economic, giving financial instittuions and corporation a trillion dollars in tax paid bailouts on the argument that without them the economy will collapse. What will collapse of course is the Ponzi Scheme invented by dishonest, greedy corporate execs to enrich themselves and stick the shareholder and the taxpayer with the tab.

SHAMEFUL. Not one more dollar for bailouts. Let market forces resolve this..

[partyofone]

This is conflict of interest, cronyism and corruption at its worst. ENOUGH

Rorbert Rubin, Citigroup Exec Committe Chair, Obama advisor, former Clinton Sec. of Treasury, former CEO of Goldman Sachs, said publicly in January 2008 there was not meltdown, just economic cyles, no responsibility on Wall Street for the mortgage crisis. Here's what Rubin said in Fortune, it is a calculated effort to deceive or evidence of incompetence.

http://money.cnn.com/2008/01/31/news/economy/rubin_benner.fortune/

These corporations are being led by dishonest, greedy, mega millionaires who are protecting themselves and their private fortunes. The baliouts do nothing for average Americans except make them as taxpayer deep deep in debt. What percentage of the Federal Budget is now no more than interest payments on the exploding national debt. With stock prices in a tailspin, the Wall Street execs and directors suddenly are being hit in their pocketbooks, and want tax dollars to compensate them for their losses.

Let the free market system play out. Let those with visionary leadership and investor credibility survive and let the others die or be salvaged by their stronger competitors.

[Erdgeist]

After the dust settles, fingers will point to SEC Chairman Cox who will be looked upon as the man who helped deepen the recession. He has ignored all the lessons learned about short selling going back to the 1600s in Holland. He has ignored all that was learned about the financial market collapse of 1929 to 1933 by permitting naked short selling and by refusing, in light of the evidence, to reinstate the Uptick Rule (you can only short a stock [bet on it going down] if and when it goes up, hence uptick). This is the main reason Citigroup Inc is talking with Federal Reserve and the U.S. Treasury Department. Brutal bear raids on Citigroup are taking their toll -- and all because of SEC Chairman Cox's irrational commitment to naked short selling and the ban on the Uptick Rule.

[Soulsurfer]

What do you expect? Even after the Enron / Tyco/ Arthur Anderson meltdown bush made cosmetic changes to the regulations, and then made sure they wouldn't be enforced. This is the MO for the whole of the government's regulatory agencies for the last 8 years! Lobbyists and industry hacks regulating their own industry..........turns out they're not so patriotic OR smart.

[ForRichardorPoorer]

If Citi Bank gets a bailout from the goverment, ie, the taxpayers of this country, then i will give myself a bailout and not pay Citi Bank the balance owed on the credit card. I mean, i don't want to pay twice....
And if my credit report gets a ding in it, so be it......people with bad credit, no jobs, etc.... have been able to obtain all types of credit and bailouts by people who have good credit..... Example....a friend of mine lives down the street. He had bad credit. He bought better cars, a bigger home and had two credit cards for each of my one. He lived this way from 2000 to the present. He doesn't give a rats ass about losing his "hummer" or his large house. THe companies who financed his lifestyle for the past eight years will write off the debts, and send me and you (taxpayers with good credit) the bill.....

[cmeans29]

Citi Bank received $25 billion of the $350 B allocated by the goverment.

[Egalitare]

So they should piss thru another $25 B in no time flat!

[dgscol]

How do we know that they have not manipulated their stock price with a hedgefunder, in order to obtain a bailout (free money)?

[yappnmutt]

bank of america is next in line