Citigroup is 'financially sound'

How bad is it out there? So bad that the guy who runs the "pre-eminent financial services company" on the planet has to tell his employees that the bank is not running out of money. CNBC reports this morning that Citigroup CEO Vikram Pandit sent a letter to his employees telling them the company is "financially sound."

The letter was necessary because of yesterday's news that "the head of a Dubai-owned investment firm said funds from Persian Gulf sovereign governments may not be enough to bail out the bank."

Did someone just say, "bail out the bank"?  Yes, someone did. (Riley McDermid of MarketWatch).

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com. 

Comments

[jaded]

better that some Persian Gulf government bail out Citi than the U.S. taxpayer.

[lefty]

you know, it's time for you to 'bail out' of that rent you pay! and if you dream of coming back to california it's time for that too! buy now while the market is at a standstill and you'll get your best shot in beautiful metro L.A.!! hey, san diego is ok too :)

[sunsetbeachguy]

If you believe a CEO's soundness proclamations, then I have some Enron stock to sell you.

Ken Lay said exactly the same thing within 60 days of Enron's bankruptcy.

Enron was the financials business model applied to the energy sector.

Run for the hills.

[Tombstone Realty]

Yeap -

I'm sure the Saudi funds would supply more, I had thought they couldn't pay anything else - but apparently there's a cap on how much foreign sources can hold of a bank only about 7% I believe, and the Saudi fund has tapped that. So they need to get others into the act. Like the US government, they hope.

But now I've read that the Saudis have asked Lefty to organize a consortium of fund owners. While the market is dismissive of the idea, Lefty has been quoted as saying "Now's the time to invest in the banks! They can't go any lower!! Get in now while you still can!!! There's profit to be made!!!"

*snuggles Troll*

[mike]

VILES: WHAT THE HELL DOES THIS ONE HAVE TO DO WITH l.a. LAND???????????????????

[Laker]

These news actually bit surprising. I was sure WAMU will go belly up way before CITI...
I said before and not instead...they both have huge amount of toxic waste loans. Second mortgages that are now worth 0 on the dollar...So they are both insolvent.
Nice....I sure hope FDIC has enough cash....I don't keep anything in CITI or WAMU past $1000-2000 change.

[IToldu2CashOut]

You mean those 3-5 letters for citi credit cards I used to get a week didn't pay off for them.? I mean for years I was just shredding them but I assumed some responsible borrowers were jumping at the opportunity to get their twelve credit card.

To all the developers, speculators, banks, and Cali home owners sitting on their houses praying they will rise back up any day now Kenny G says:

You got to know when to hold 'em, know when to fold 'em
Know when to walk away. Know when to RUN.
You never count your money, while sitting at the table.
They'll be plenty time for counting when the dealings done.

[peteviles]

mike wrote, "VILES: WHAT THE HELL DOES THIS ONE HAVE TO DO WITH l.a. LAND???????????????????

Thanks, Mike. Now. Take a deep breath, and take your finger off the Caps Lock key. You don't have to shout, I can hear you.

Now, think about it. Real estate is local, right? Well, financing is not. And the availability of financing is a key ingredient in demand for real estate -- particularly in a market like Los Angeles, where first-time home-buyers almost invariably use aggressive financing. Demand here has as much to do with the availabilty of credit as it does with income.

The point of the post is, some banks are in trouble. And not just the little banks.

But I take your point. It's a stretch.

[upthecreek]

Isn't that the same thing that Angelo said about Countrywide last year... Ya Right!!!!

[mike]

sorry. as you can see by the L.A. i was writing in reverse.

by the way, it is a stretch but i don't reall care. we have to comment just like you have to blog about something...

[Laker]

I think mike actually has his finger stuck on the SHIFT button (as you don't need to keep the CAPS LOCK pressed just click once...)
The reason mike did that is because he was seeing his inability to pay his mortgage, being under water while his house is losing couple of thousand dollars every week! So he wanted to scream SHxT !!!! (He missed the H..)

[the problemwithcaring]

@ IToldu2CashOut: I think you mean Kenny Rogers. I love that song.

@mike: if you don't know how a possible Citibank failure is connected to LA real estate, a blog of this sort perhaps isn't the place to learn...

At this point, the best thing you can do is to hold down a punctuation key until your fingers bleed, while screaming "Renting is un-American" at the computer screen.

When I don't understand something, that usually works for me.

[Tombstone Realty]

I've read that Wamu will go belly up in first quarter of 09. I'm already looking for a new bank - because I'm not sure that Wells Fargo or JP Morgan Chase have enough liquidity to purchase them out.

And Mike....

Banks = Mortgages
Mortgages = Real Estate
Therefore
Banks = Real Estate

Chill my friend. It's a blog.

[tom]

Hey Leftie!!! Lets flip some houses!!! there's some great bargains out there right now!!

[IToldu2CashOut]

the problem with caring is certainly right. I did mean Kenny Rogers. I should shoot myself.

BANG. Its done.

See you guys in the afterlife. Someone take my overpriced apartment. I'll ask god how much a 500k condo in LA is really worth.

He says, "Don't trust lefty". God speaks in mysterious ways.

[Liz Bebe]

Wake up LoCal boys. Your little baby babbles from earlier in the year seem quite humorous now.

Do not estimate the extraordinary greed (and hubris) of the bankers and mortgage holders (not to mention loan brokers and appraisers). Forget us little folks gaming the system for a few dollars -- we cannot compare this to the scam taking place across the country: grown men whining to the Feds about how they have blown off their entire lower body and don't know why. Can you give 25B to a company with no legs and expect them to grow back normally?

Citipricks, WipemyassMU, Chasemymoney, Butt of America, Wells Puck -- pick one and you will have predicted the next failure.

For me, it's like shooting fish in a barrel. I am taking my shot at Citi -- they are going to eat my second.

NorCal Bebe