Citi Could Need $10 Billion In New Capital

Wall Street Journal:

Citigroup Inc. may need to raise as much as $10 billion in new capital, according to people familiar with the matter, as the government continues negotiations with banks over the results of its so-called stress tests.

Read the whole story: Wall Street Journal

Comments

[blueskybigstar]

02:49 PM on 05/06/2009

You could start ten new countries with this amount of money.

[phylliscooper1]

05:30 PM on 05/03/2009

Yes, and me an most of my closest friends may need their mortgage paid next month.

[Obamagirl214]

05:25 PM on 05/03/2009

Not another dime!!! NO MORE BAILOUTS!!!

[Barmakova]

03:15 PM on 05/03/2009

Citi was done in by it and the other major money center banks's successful efforts in the late 1990s to reverse the Glass-Steagall Act, separating commercial from investment banking activities. This resulted in a new mindset, willing to take more risks such as the old investment banks did, but without the talent or the proper safeguards. As a result, the bank over-leveraged itself in pursuit of investment bank-like profits, but without the necessary skill set. There should be a return on the part of Citi and other large banks to a more traditional commercial banking approach, especially since the bank is acting in a fiduciary capacity to such a large retail customer base.

[Paul Hackett]

12:42 PM on 05/03/2009

Below is an interview with Jim Rogers explaining what is wrong with these bailouts. If you don't know who Jim Rogers is, he was George Soros' partner at the Quantum Fund in the 1970s - he was basically the guy who made the strategic decisions about what to buy and sel and for what reasons, while leaving to Soros the much more trivial job of timing the market to implement those decisions. HIs grip of macro-economics is generally considered to be magisterial, he made fortunes predicting the crash of 1987, the commodity boom of the 70s and of the last 6 years, he also predicted the housing and credit crashes.

He is a VERY smart guy, not just some nerdy trader, he studied HIstory at Yale and then Politics, Philosophy and Economics at Oxford. After he became rich he didn't just stay behind his desk, he traveled around the world multiple times on motor bikes (he's in the Guinness Book of Records for some of his trips) as he has a genuine interest in the world. He has famously referred to investing as a giant three dimensional puzzle having believed for decades that the entire global economy is interconnected.

I strongly urge you to view the following video, if you can find any holes in his arguments regarding the errors this administration is making I would be delighted and relieved to hear them:

http://www.youtube.com/watch?v=1mzDIb6sebM

[jdw1981]

11:34 AM on 05/03/2009

I hate to apply a biblical metaphor to the current economic situation, but since there are similar references in many other cultures, I think the Tower of Babel is an appropriate scenario.

Obama and Geithner can keep throwing our money at the banks in an attempt to keep them from failing but no matter how high or "too big to fail" they are, they're going to come crashing down. And the more the Obama administration tries, the harder they will fall, and the greater the devastating consequences will be.

BTW how can banks be "too big to fail" when they ARE failing?

[vindrag]

11:10 AM on 05/03/2009

I just got turned down for a Citi Bank credit card. I have an excellent credit rating and very little credit card debt. According to Citi, I was turned down because I have opened too many credit cards recently. The fact that I have been able to open cards from other banks would seem to indicate that I am in fact a good credit risk. What I love is their letter placing the blame on the consumer rather than themselves.

[MissingAmerica]

10:23 AM on 05/03/2009

No problem! They'll just raise the interest rates and fees on their charge cards again! The government bailout (a name which refers to a futile effort to rescue a sinking vessel) isn't working. Citi raised it's interest rates again last month and Chase, having just purchased WaMu, is recovering its capital by raising their interest rates on Chase Cards to 40.56%!!!!! The stimulus money they are receiving is supposed to be helping us, but they are using it to help themselves. It's time to inject them with sanity as opposed to money.

[senseandnonsense]

08:38 AM on 05/03/2009

Let's flush these problem banks! There are small banks out there that don't have these problems. Let them grow and fill the void left from the banks "too big to fail."

[Mondayboy]

07:41 AM on 05/03/2009

citi should be allowed to fail

[2Bfair]

07:26 AM on 05/03/2009

I am confused. Why is the bankruptcy/nationalization issue all or none for the banks. Why not try that approach with one and see if it works better? Citi seems the ideal candidate. It is Robert Rubin's de-regulation playground and is being used for economic blackmail because it is "too big to fail." It seems that it is also too big a black hole to keep throwing billions of taxpayer dollars into. Nationalize, get rid of the current execs and board, and see if it can be fixed, in the interest of the nation, not just at the expense of the nation.

[hilary916]

03:35 AM on 05/03/2009

NO.

[ko2ko2]

03:03 AM on 05/03/2009

Obama better protect the taxpayers, don't give them another dime!

Last time I checked the FDiC was used for bank failures, I guess only if you don't contribute to any campaign...

[roninroshi]

02:10 AM on 05/03/2009

They need to go down!

[lynjs]

01:12 AM on 05/03/2009

Are they going to wipe out or slash people's credit card debt or help with a mortgatge refinance? If not, NOT ONE MORE DIME. Enough, let me eat cake. We have for years...at 30% interest plus over the limit and late fees.