After announcing the lay off of 52,000 staff, Citi saw a massive 20 percent drop in share price on Friday alone, a 60 percent drop on the week and a loss of $20 billion so far this year.
Mind you, several folks predicted this a while back and Cramer may just be protecting his ass-ets after calling Bear Stearns wrong. On the other hand, I was talking favourably about Citigroup only three weeks ago, so I’m not going to call the kettle black.
With the U.S. Government pumping a further $20 billion into Citi’s body, can they revive this bank? Probably … after all, like Royal Bank of Scotland, this is another of the world’s largest banks that has now effectively been nationalised with the US Treasury and FDIC protecting a further $306 billion of mortgage and mortgage-backed securities on Citi’s books.
Nothing like a crisis to bring out the Government’s cash, but you do wonder how GM, Chrysler and Ford are feeling as they watch all of this.