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<!-- headline one : start --><TR>Wall Street's last titan is on its knees
</TR><!-- headline one : end --><TR>Citigroup starts talks with US govt, which may step in to avoid Lehman-like aftermath </TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
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Citigroup's announcement last Monday that it would cut thousands of jobs made headlines in London (pictured) and around the world. -- PHOTO: AFP
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->New York - Less than two months ago, Citigroup emerged from the wreckage of the financial crisis as one of the last titans left standing on Wall Street.
Now, in a stunning turnabout, the banking giant has fallen to its knees after a crisis in confidence erased half its stock-market value in three days - and left it running short on time and options.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story --><STYLE type=text/css> #related .quote {background-color:#E7F7FF; padding:8px;margin:0px 0px 5px 0px;} #related .quote .headline {font-family: Verdana, Arial, Helvetica, sans-serif; font-size:10px;font-weight:bold; border-bottom:3px double #007BFF; color:#036; text-transform:uppercase; padding-bottom:5px;} #related .quote .text {font-size:11px;color:#036;padding:5px 0px;} </STYLE>Want a govt plane? It's a click away
Albany - With the economy continuing to tumble, more US state and local governments are using the Web to clear inventory and bolster deflated budgets.
Need a desk? An airplane? How about an armoured personnel carrier? Items like these and others are now just a click away for the highest bidder.
</TD></TR></TBODY></TABLE>The bank has started talks with the United States government, which may step in with a rescue bid. Treasury Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke may favour a rescue to avoid the aftermath of Lehman Brothers' bankruptcy in September.
Citigroup's US$2 trillion (S$3 trillion) worth of assets dwarfs companies such as American International Group that got support from the US government this year.
'Citi is in the category of 'too big to fail',' said Mr Michael Holland, chairman and founder of Holland & Co, which oversees US$4 billion. 'There is a commitment from this administration and the next to do what it takes to save Citi.'
While Citigroup executives say the company has adequate capital and liquidity to ride out the crisis, its tumbling share price may shake confidence. A similar scenario had played out at Lehman, when chief executive officer Richard Fuld declared the firm was 'on the right track' five days before the firm went bankrupt.
'The market may be implying some sort of regulatory intervention,' said former Lehman analyst Jason Goldberg.
Citigroup, which was born from the merger of Citicorp and Travelers Group, has been seeing a steady decline in its share price. This snowballed last week as speculation grew that the bank may require a government bailout, a forced merger or an ouster of the company's embattled chief executive Vikram Pandit.
In the last five days alone, more than half its market value was vaporised, with calls intensifying for it to find ways to lift its stock price, including splitting the firm, selling pieces, or selling itself outright. The bank has fought back vigorously saying its capital position is strong. Last Monday, it announced plans to cut costs and slash 52,000 jobs.
The speculation swirling round Citigroup comes as shares on Wall Street soared late Friday after reports that President-elect Barack Obama would name New York Federal Reserve president Timothy F. Geithner as his treasury secretary.
Still, Friday's gains were not enough to wipe away the losses of the last two days, which brought Wall Street to its lowest levels since 1997. The Dow ended the week down 5 per cent, and the S&P 500 was 8 per cent lower.
New York Times, Bloomberg <!-- end of for each --><!-- Current Ratings : start --><!-- Current Ratings : end --><!-- vbbintegration : start --><!-- vbbintegration : end --><!-- dennis change request 20070424 : start --><!---Google ad - Start : Sun, 23 Nov 2008 07:53:09:685---><!-- AdSpace STI Google ad tag --><SCRIPT language=JavaScript1.1 src="http://ads.asia1.com.sg/js.ng/site=tsti&pagepos=20&size=10X10"> </SCRIPT>
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<!-- headline one : start --><TR>Wall Street's last titan is on its knees
</TR><!-- headline one : end --><TR>Citigroup starts talks with US govt, which may step in to avoid Lehman-like aftermath </TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
Citigroup's announcement last Monday that it would cut thousands of jobs made headlines in London (pictured) and around the world. -- PHOTO: AFP
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->New York - Less than two months ago, Citigroup emerged from the wreckage of the financial crisis as one of the last titans left standing on Wall Street.
Now, in a stunning turnabout, the banking giant has fallen to its knees after a crisis in confidence erased half its stock-market value in three days - and left it running short on time and options.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story --><STYLE type=text/css> #related .quote {background-color:#E7F7FF; padding:8px;margin:0px 0px 5px 0px;} #related .quote .headline {font-family: Verdana, Arial, Helvetica, sans-serif; font-size:10px;font-weight:bold; border-bottom:3px double #007BFF; color:#036; text-transform:uppercase; padding-bottom:5px;} #related .quote .text {font-size:11px;color:#036;padding:5px 0px;} </STYLE>Want a govt plane? It's a click away
Albany - With the economy continuing to tumble, more US state and local governments are using the Web to clear inventory and bolster deflated budgets.
Need a desk? An airplane? How about an armoured personnel carrier? Items like these and others are now just a click away for the highest bidder.
</TD></TR></TBODY></TABLE>The bank has started talks with the United States government, which may step in with a rescue bid. Treasury Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke may favour a rescue to avoid the aftermath of Lehman Brothers' bankruptcy in September.
Citigroup's US$2 trillion (S$3 trillion) worth of assets dwarfs companies such as American International Group that got support from the US government this year.
'Citi is in the category of 'too big to fail',' said Mr Michael Holland, chairman and founder of Holland & Co, which oversees US$4 billion. 'There is a commitment from this administration and the next to do what it takes to save Citi.'
While Citigroup executives say the company has adequate capital and liquidity to ride out the crisis, its tumbling share price may shake confidence. A similar scenario had played out at Lehman, when chief executive officer Richard Fuld declared the firm was 'on the right track' five days before the firm went bankrupt.
'The market may be implying some sort of regulatory intervention,' said former Lehman analyst Jason Goldberg.
Citigroup, which was born from the merger of Citicorp and Travelers Group, has been seeing a steady decline in its share price. This snowballed last week as speculation grew that the bank may require a government bailout, a forced merger or an ouster of the company's embattled chief executive Vikram Pandit.
In the last five days alone, more than half its market value was vaporised, with calls intensifying for it to find ways to lift its stock price, including splitting the firm, selling pieces, or selling itself outright. The bank has fought back vigorously saying its capital position is strong. Last Monday, it announced plans to cut costs and slash 52,000 jobs.
The speculation swirling round Citigroup comes as shares on Wall Street soared late Friday after reports that President-elect Barack Obama would name New York Federal Reserve president Timothy F. Geithner as his treasury secretary.
Still, Friday's gains were not enough to wipe away the losses of the last two days, which brought Wall Street to its lowest levels since 1997. The Dow ended the week down 5 per cent, and the S&P 500 was 8 per cent lower.
New York Times, Bloomberg <!-- end of for each --><!-- Current Ratings : start --><!-- Current Ratings : end --><!-- vbbintegration : start --><!-- vbbintegration : end --><!-- dennis change request 20070424 : start --><!---Google ad - Start : Sun, 23 Nov 2008 07:53:09:685---><!-- AdSpace STI Google ad tag --><SCRIPT language=JavaScript1.1 src="http://ads.asia1.com.sg/js.ng/site=tsti&pagepos=20&size=10X10"> </SCRIPT>
