Citigroup said to need up to $10 billion: report

[Barack_America]

Source: Reuters

NEW YORK (Reuters) - Citigroup Inc may need to generate up to $10 billion in new capital to meet the requirements of the U.S. government's stress tests, the Wall Street Journal reported on its website on Friday,

Like other financial institutions, the bank is in talks with the Federal Reserve about whether it needs more capital, the Journal said, citing unnamed sources.

Citigroup may need less if regulators accept its arguments about its financial health. In a best-case scenario, Citigroup could have a roughly $500 million cushion above what the government requires, the paper reported.

Calls to Citigroup were not immediately returned. A spokesman for the U.S. Treasury had no comment.

Read more: http://www.reuters.com/article/newsOne/idUSTRE54107J20090502

---

So when should we expect that bankruptcy filing?

:shrug:

[aquart]

1. So the thieving bastards are insolvent?

What a surprise.

[Barack_America]

2. Despite doubling my interest rate, apparently yes.

:eyes:

[WillYourVoteBCounted]

22. there's no accounting, so its probably getting stolen

right from under our noses.

And the banking committee? They sure are looking the other way, only making a few speeches
now and then but not doing anything.

[Hawkeye-X]

3. Citibank can have their 10 billion IF three conditions are met

Complete clean slate with Equifax, TransUnion and Expedian.
Zero balance on all of our Citi credit cards
The CEO resign WITHOUT golden parachutes.

Your owners.

The taxpayers.

Hawkeye-X

[blue_onyx]

4. I hope President Obama puts his foot down regarding Citigroup

They should not get another dime until they enter bankruptcy. What's good enough for Chrysler is good enough for Citigroup.

[Double T]

5. citigroup and boa need to be dismantled and their assets sold off to many regional banks.

BO needs to cut to the chase with these two most corrupt financial institutions.

[mckara]

6. Citigroup Should Go Away

We should only save strong banks: Solvent Banks.

[jimmybama]

7. Fuck em'

Fuck them and BOA. Let them file Bankruptcy.

[Owl]

32. Seconded.

[radfringe]

33. I'll second the seconded...

screw'em

[imdjh]

27. They can't. It would crash the cocaine market.

[Metta]

8. Take them over. Don't give them another penny and fire the management and board.

Anything other than that is injust.

[ixion]

9. what happened to all the profits?

I mean, just a couple weeks ago they were all flush with cash and bragging about making a profit.

And now they want another 10B.

Let'em fail, says I.

[Barack_America]

12. Funny math. Nothing more. nt

[Igel]

16. They could still have been there.

The stress tests were simulations of how the banks would fare under various economic scenarios. They might conceivably be fine now, and, in fact, not need to file for bankruptcy. Probably they don't.

But if the worst-case scenarios are right, they might. So do they fund them for the worst case now, or wait?

Or is this a conflict of interest? Geithner and staff design the stress tests, determine whether Citi needs more money, and determines how much power and control Citi has to cede to Geitner for the money. If they don't get more control, Citi may do things they don't like that cause the government to lose money. (As a rule of thumb, everybody considers their investment to be the most important.)

[Lucky Luciano]

31. Exactly right - and this is lost on most people here.

I think the stress tests try to estimate what kind of losses could be sustained, for example, if unemployment went to 10.5%. KBW, a broker/dealer specializing in financial companies, also has done some stress tests of their own under the assumption that unemployment goes to 12.5%, which I think is better because 10.5% is a somewhat likely event - and a stress test should be estimating losses in very unlikely, but plausible events (2.5% probabilities for example).

[Telly Savalas]

37. If Citi needs an additional $10 billion to be adequately capitalized

shouldn't this $10 billion have been booked as a "Credit Reserve Build" or something like that on the income statement, which would have resulted in a $9 billion Q1 loss instead of the $1 billionish profit they reported?

Or is this $10 billion capital deficiency something that magically materialized since 3/31/09?

[Lucky Luciano]

39. I am not an expert at financial accounting, but I doubt that

reserve builds are required for worst case scenarios (like what a stress test does) - I think reserve builds are only required for current scenarios and short term predictions. I guess that banks in the future may be forced to have reserve builds based on stress scenarios rather than what is immediately forseeable. :shrug: I could be wrong though.

[Telly Savalas]

40. But as you indicated earlier, the stress tests scenarios Geithner uses

are actually fairly likely scenarios, and not worst case scenarios.

My knowledge of financial accounting is pretty shaky as well, but I do get that GAAP reserves are probably calculated differently than reserves to meet regulatory requirements. However the disconnect between the two implied numbers is way too big to make any sense. If a bank says they made a $1.5 billion profit in the last quarter, then a month later says their capital reserves are light to the tune of $10 billion, that suggests that their quarterly report's numbers are dramatically understating their reserve requirements in some fashion.

[nc4bo]

10. If bankrupcy is good enough for the Big 3 than it should certainly be good enough for ChitiGroup. n

Enough already.

[belpejic]

11. Let them fail (nt)

[maseman]

13. They should borrow it from the NY Mets

[Samantha]

14. Maybe Citigroup's executives can stand on the streets in Michigan

with tin cans and ask for donations.

Sam

[Barack_America]

15. In Michigan you can collect cans and turn them in for the 10 cent deposit.

Let the Citi execs earn the money that way.

It's a "green job" too!

[NBachers]

17. Fuck Citigroup. They don't deserve a fucking penny

They took over the Washington Mutual bank at the corner and promptly raised the ATM fee from 2 bucks to 3 bucks.

They're airing absolutely obnoxious commercials here in California with lyrics from John Lennon's Instant Karma. They use the "We all shine on Like the Moon and the Stars and the Sun" lyrics. What they don't air is: "Instant karmas gonna get you
Gonna knock you right on the head
Instant karmas gonna get you
Gonna look you right in the face
Instant karmas gonna get you
Gonna knock you off your feet"

Fuck Citigroup. They abort John Lennon's lyrics. Let them reap their own Instant Fucking Karma.

[Barack_America]

18. New Reuters article: Citigroup need for capital may be "manageable"

http://www.reuters.com/article/newsOne/idUSN0135284020090502

Sounds like someone didn't like the tone of the first one and decided a little sugarcoating was in order.

[saigon68]

19. When do the new BONUSES begin?

For these ass-wipes?

[mbperrin]

34. How about day before yesterday?

Citigroup Inc., soon to be one-third owned by the U.S. government, is asking the Treasury for permission to pay special bonuses to many key employees, according to people familiar with the matter.

http://online.wsj.com/article/SB124096311194466041.html#mod=testMod

[Psephos]

20. In other news, Psephos is said to need up to $10 million

Which is extremely reasonable, considering it's an order of magnitude less than Citi "needs," and I haven't been paid any bonuses, nor have I gambled all my capital away on voodoo derivatives, nor have I raised anyone's credit card interest to 29% when I know damn well they can't pay it.

[WillYourVoteBCounted]

21. why give them money? they keep offshoring jobs the asshats

why would we pay money that only goes to the rich ceos and
help those devils cut more jobs, sending them to India?

[TroubleMan]

23. No, no, no. Let Saudigroup fail.

They want to give a bank owned by the Saudis millions or billions, but let Chrysler and GM fail? WTF.

[Zynx]

24. Commercial banks can't file for bankruptcy.

Don't confuse that with Lehman. Commercial banks cannot legally go into Chapter 11.

[Lucky Luciano]

30. LEH, for that matter was also liquidated. nt

[Hubert Flottz]

25. Let them eat cake!

[pjt7]

26. Chop 'em up

The phrase "too big too exist",needs to be America's banking mantra.

[BobTheSubgenius]

28. At least a large part of it is run as a giant MLM.

What can you expect?

[Name removed]

29. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Tab]

35. Why would they??

They've taken plenty of MY money.


And on edit: I shed no tears for Cirigroup. They certainly never shed any for me.

[pinniped]

36. Looks like the .gov will be printing up 10,000,000,000.00 more in bank notes....

for these clowns.

[ohio2007]

43. ..and China isn't buying into the T bills anymore. Guess its $10 loaf of bread around the corner

[gauguin57]

38. If we give them $10 billion, the least they can do is lower our interest rates!

I hate the way they do business.

[Hotler]

41. Suck it Citi Group. That is all.

[ohio2007]

42. Congress will vote "yes" with citi corp quarterly welfare check .soon. Funny how they pinch pennies

on the Gitmo closure though.

[AlphaCentauri]

44. I'll just need one million to expand my small business can someone bail me out

:think: