What's the true story on CITI?

[malaise]

Why is Madoff on TV more than Palin, while they're hiding the mess over at CITI.

Despite all the bailout money CITI is trading at under $5 right now.

[PVnRT]

1. They're selling off a chunk of their investment house

Morgan Stanley? That may be who they're selling it to. I get the names mixed up.

[RB TexLa]

2. Morgan Stanley bought 51% of Smith Barney and will probably buy the rest at some point.

Citi appears to be going toward the "good bank, bad bank" split that was popular after the savings and loan fallout. They will organize their profitable divisions into one bank to keep and then sell off what they can out of the bad or form it into a separate bank to spin off and unload.

There will be buyers for the "bad bank," there is always someone who believes they can turn anything around no matter how bad a shape it's in. Of course sometimes they are right.

[taught_me_patience]

3. Desperately sellling units to raise cash

Why do they need cash? Their balance sheets are probably worse than we know. I know for a fact that they are not marking to market some of their mortgage backed securities.

[marketcrazy1]

4. think, insolvent??

hundreds of billions in level 3 "assets" ( off balance sheet ) that are worth a fraction of their stated value, CITI is not alone, other banks have the same toxic shit hiding in level 3. and dont even mention their derivatives book!!! ( trillions ) the whole banking system is broken! ( has been for quite awhile )

[taught_me_patience]

6. Bank of America

is the next to go down and have to be rescued. They are now discovering the true toxicity of the Countrywide and Merrill Lynch portfolios. Their purchase of Merrill Lynch, at the price they purchased it, was, in my opinion, the stupidest business move of the last two year. Merrill was literally days away from bankruptcy.

[malaise]

5. Looks that way

What a mess.