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.
The result is that it looks like Citigroup has been forced into a decision to split into pieces according to Jim Cramer, who thinks Citi Group is dead and should just be Citi Bits now.
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.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...
