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[Minsc]

Used to be ~$60 a share, now it sells for under $1.

GM & GE on their way, Citigroup under $1, where does it all stop & what does this mean for my credit cards? I wouldn't have even thought a credit card company could end up in this situation, even if that's not what caused it.

NEW YORK (CNNMoney.com) -- Citigroup logged another dismal milestone Thursday, as shares of the beleaguered bank slipped below $1 a share.

The move, which may have seemed unthinkable just months ago, came as the broader market fell once again toward new 12-year lows due to worries about the health of the banking sector and the broader economy.

Citigroup (C, Fortune 500) shares were hovering at about 99 cents in midday trading on the New York Stock Exchange, 12% lower than where they closed on Wednesday. It is the lowest level for the bank's stock since Citicorp and Travelers Group merged in 1998 to create Citigroup.

At its height, Citigroup stock traded around $57 a share. That was in December of 2006, just months before subprime mortgages began to become problems and the credit market unraveled.

But fears about Citigroup's exposure to soured mortgages and other consumer loans have sent shares plummeting this year, wiping out billions of dollars in shareholder value as a result.

The bank reported losses of nearly $28 billion last year and investors remain worried that the bank will continue to lose money as the economy weakens.

The stock lost more than half its value last month alone as speculation grew that the government would have to step in and effectively nationalize the company.

Last Friday, the government unveiled plans to convert a portion of its $45 billion stake in Citigroup into common shares, a move that could give taxpayers as much as a 36% stake in the bank.

Those efforts represented the latest government-led efforts aimed at propping up the ailing financial institution.

In October, the Treasury Department injected $25 billion into the company. Less than two months later, regulators intervened again with an additional $20 billion investment and an agreement to backstop some losses against more than $300 billion in Citigroup's troubled assets.

Since then, Citigroup has outlined plans to split the company into two businesses, effectively bringing an end to the company's "financial supermarket" model. Under the new arrangement, Citigroup would split itself into two units: Citicorp and Citi Holdings.

http://money.cnn.com/2009/03/05/news/companies/citigroup/index.htm?postversion=2009030511

 

[Gallbaro]

With these DOW components getting to as low as they can actually go, you have to wonder how much lower the indexes can actually go.

 

[Tamanon]

Citigroup has been a garbage company for years. Everything just hit at the same time though, sad.

 

[FrankT]

As Art Hogan put it so succinctly last fall were on the edge of the abyss my friend, and now even his bottom has dropped out.

 

[Minsc]

With these DOW components getting to as low as they can actually go, you have to wonder how much lower the indexes can actually go.

I heard some crazy woman was saying below 4000 from talking to someone at my work who follows all this stuff closely.

 

[Raistlin]

D00M3D

 

[Tarazet]

It's really kind of a shame. In spite of their sometimes draconian policies, they've always treated me fairly well, and if they go under I honestly won't know who to bank with from now on.

 

[bggrthnjsus]

if citigroup goes under, do i have to keep paying my citi visa bill? lol

 

[Tritroid]

if citigroup goes under, do i have to keep paying my citi visa bill? lol

...I was wondering that also. :lol

 

[Gallbaro]

I heard some crazy woman was saying below 4000 from talking to someone at my work who follows all this stuff closely.

That is not exactly what I was saying. More like, as the financial components of the DOW go to near 0 in their pricing, and then assuming the other components may loose another 10% of their valuations what range would that leave the DOW in?

 

[lil smoke]

...I was wondering that also. :lol

My student loan!

 

[Y2Kev]

if citigroup goes under, do i have to keep paying my citi visa bill? lol

Someone else will just buy the debt.

 

[Fragamemnon]

if citigroup goes under, do i have to keep paying my citi visa bill? lol

This is sort a moot answer since the government will nationalize Citi before letting it fail outright, but in a Citi bankruptcy the credit card business would likely be sold off to a competitor along with their accounts. You'd be paying off someone else.

 

[Tamanon]

Yes you still need to pay off your debt. Someone else will assume holding it and now you'll owe them instead.

 

[Gallbaro]

My student loan!

A bankruptcy judge is a lot meaner than an Indian collection agent.

Edit: You can always fake your death, I am sure they will not be so particular during bankruptcy.

 

[Fragamemnon]

It's really kind of a shame. In spite of their sometimes draconian policies, they've always treated me fairly well, and if they go under I honestly won't know who to bank with from now on.

I've been happy with them too as my credit card company for three years now. Tons of thank you rewards and some generous sign up bonuses have been quite nice, despite them not ever making a single penny in interest or late fees off my account.

 

[Minsc]

Yes you still need to pay off your debt. Someone else will assume holding it and now you'll owe them instead.

Maybe they should let the people who owe the debt buy it off, they might get more money that way, I mean, if you owed $10,000 and they sold that debt for $5,000 to another company, you might be interesting in paying $6,000 instead of the $10,000, and they'd get more money. Probably why they don't do that has to due with volume.

And yes, it seems that nationalizing the banks is all but inevitable, it's just a matter of when, since they're not doing well on their own.

 

[Fragamemnon]

Hey, anyone remember when Citi was all butthurt when the FDIC wouldn't let them eat Wachovia? Imagine where they would be now if they had been allowed to go ahead with that deal, especially since Wachovia's steaming pile of shit loans and assets are causing massive problems for Wells Fargo.

 

[Tamanon]

Maybe they should let the people who owe the debt buy it off, they might get more money that way, I mean, if you owed $10,000 and they sold that debt for $5,000 to another company, you might be interesting in paying $6,000 instead of the $10,000, and they'd get more money. Probably why they don't do that has to due with volume.

You're able to do that occasionally with debt. It's just not done too often because debt s able to be listed as an asset for credit companies. While paying it off at a lower rate will increase capital, it'll lower the assets.

And yeah, thank god Citi didn't buy Wachovia.

 

[Y2Kev]

You're able to do that occasionally with debt. It's just not done too often because debt s able to be listed as an asset for credit companies. While paying it off at a lower rate will increase capital, it'll lower the assets.

And yeah, thank god Citi didn't buy Wachovia.

Don't thank god, thank Sheila Bair.

 

[Phoenix]

Used to be ~$60 a share, now it sells for under $1.

GM & GE on their way, Citigroup under $1, where does it all stop & what does this mean for my credit cards? I wouldn't have even thought a credit card company could end up in this situation, even if that's not what caused it.



http://money.cnn.com/2009/03/05/news/companies/citigroup/index.htm?postversion=2009030511

GE actually has a looooooong way to go before they end up in the same garbage situation as Citi or GM. GM has a product that too few people want when married with the expenses and debt, Citi owns too many bad investments. GE has their bad capital group, but for the most part the business remains on solid footing. Their recent calamity came from cutting the divident.

 

[gofreak]

There are (much smaller, obviously) banks here trading around 20c or even less lately. I think some could be really good buys right now if one had money to spare..they can't all be nationalised, they can't all go under..

 

[Tarazet]

There are (much smaller, obviously) banks here trading around 20c or even less lately. I think some could be really good buys right now if one had money to spare..they can't all be nationalised, they can't all go under..

If AIG fails, they can. Otherwise it'll just be the dumbest of them.

 

[Gallbaro]

GE actually has a looooooong way to go before they end up in the same garbage situation as Citi or GM. GM has a product that too few people want when married with the expenses and debt, Citi owns too many bad investments. GE has their bad capital group, but for the most part the business remains on solid footing. Their recent calamity came from cutting the divident.

Before this burst over half of GE's income came from its finance department, it has significant amount of unpaid obligations and lives off of corporate paper.

They are screwed.

 

[gimmmick]

My loan I took out to buy my condo 2.5 years ago is with citi group. I wounder if I just stoped making payments... would they notice? I'm just waiting to see where it's going to be sold too in the next 6 months.

 

[Somnid]

People say others will buy up the debt but I wonder how long that will be the case. Part of the reason why we are where we are is shitty lending practices, I can't imagine there's a whole lot of people looking to jump on more debts in hopes of turning a profit even if they are cheap. It's certainly extremely risky in this economic environment. It's possible that people could wind up with free money.

 

[RSTEIN]

That is not exactly what I was saying. More like, as the financial components of the DOW go to near 0 in their pricing, and then assuming the other components may loose another 10% of their valuations what range would that leave the DOW in?

The Dow is a price-weighted index. Citi could go to 0 and I think it would only lead to a ~50 drop in the Dow. IBM is more important than C, MSFT, GE + a few other sub $20 stocks combined. It's a stupid, stupid index. That's why most professional traders follow the SP500.

 

[Minsc]

My loan I took out to buy my condo 2.5 years ago is with citi group. I wounder if I just stoped making payments... would they notice? I'm just waiting to see where it's going to be sold too in the next 6 months.

Not sure, but I am annoyed that that's basically what you need to do to get lower rates. They should fucking be giving the people who pay every time and on time the lower rates, not the morons who took loans they can't afford.

If the people who actually pay their mortgages got lower rates, they'd have extra money, and those people would actually spend their extra money back in the economy and help fix this mess, instead of the people who can't make the payments continuing to carry on charging things they can't afford creating more disasters.

 

[Tarazet]

Not sure, but I am annoyed that that's basically what you need to do to get lower rates. They should fucking be giving the people who pay every time and on time the lower rates, not the morons who took loans they can't afford.

If the people who actually pay their mortgages got lower rates, they'd have extra money, and those people would actually spend their extra money back in the economy and help fix this mess, instead of the people who can't make the payments continuing to carry on charging things they can't afford creating more disasters.

Yeah really.. it's kind of sick that people are intentionally missing payments and getting behind so that they can get a sweetheart refi deal. The delinquency rate on homes is nearing 8%.. how much of that is just people hoping to cash in? It's not like they'll need the credit score to buy another home anytime soon, if they can keep what they've got.

 

[~Devil Trigger~]

2012

 

[Yaweee]

This is sort a moot answer since the government will nationalize Citi before letting it fail outright, but in a Citi bankruptcy the credit card business would likely be sold off to a competitor along with their accounts. You'd be paying off someone else.

That is how debt works, generally. The failure of the lender doesn't negate the debt.

 

[PrivateWHudson]

Maybe they should let the people who owe the debt buy it off, they might get more money that way, I mean, if you owed $10,000 and they sold that debt for $5,000 to another company, you might be interesting in paying $6,000 instead of the $10,000, and they'd get more money. Probably why they don't do that has to due with volume.

And yes, it seems that nationalizing the banks is all but inevitable, it's just a matter of when, since they're not doing well on their own.

Damn that's a great idea. Seriously, with all of the nationalizing of the banks anyway, the government should force them to do this. Make Citi offer the debtor the same buyout price as is being offered by a competitor. If the competitor really wants the business, they can loan the money for the buyout to the debtor.

 

[GDJustin]

You know, I'm wishing I was about 10 years older and was established in my career instead of just starting it. It's frustrating knowing there will likely NEVER be an opportunity to invest at levels this cheap, and yet not having any savings to actually dive in with.

When I see the dow tanking all I hear in my head is "OPPORTUNITY OPPORTUNITY OPPORTUNITY" - there are a lot of undervalued companies out there. Anything socked away today will be shooting up in 5-10 years.

 

[soul creator]

http://lolfed.com/2009/03/01/nyse-introduces-new-dollar-menu/

 

[Meier]

I should buy some of their stock. I mean honestly, it'll obviously go back up in time and worst case scenario is I lose $500 or something.

 

[Minsc]

I should buy some of their stock. I mean honestly, it'll obviously go back up in time and worst case scenario is I lose $500 or something.

I think that's what people who bought Freddie and Fannie believed.

Spoiler

At least I did, thankfully didn't get too badly burnt

 

[Minsc]

It gets even better! NBC just announced that the bailout money that went to banks (which the above Citigroup is part of), was blown on of all things, paying for limousine services! Glad to see the banks are doing what needs to be done with the taxpayers money that's supposed to be used to save them from this mess.

 

[inner-G]

I heard some crazy woman was saying below 4000 from talking to someone at my work who follows all this stuff closely.

4000 would probably be a good time to buy index funds, eh?

 

[gigapower]

It gets even better! NBC just announced that the bailout money that went to banks (which the above Citigroup is part of), was blown on of all things, paying for limousine services! Glad to see the banks are doing what needs to be done with the taxpayers money that's supposed to be used to save them from this mess.

What did you expect them to do with it.

 

[Raistlin]

Ended the day at $1.02 ... so it's no longer a penny stock

CITIGROUP SAVED!!!

 

[Justin Bailey]

GE ended at 6.66. Never let it be said that Wall Street doesn't have a sense of humor.

 

[Minsc]

What did you expect them to do with it.

I have to admit it's slightly classier than using it on prostitutes.

 

[kevm3]

What happened for Citi to completely go down like this? The same type of 'bad loans' as the other banks or was it something else?

 

[PrivateWHudson]

I have to admit it's slightly classier than using it on prostitutes.

What do you think they use the limos for?

 

[Mar]

I really dislike Citi. I'm having trouble feigning any sympathy for them.

You reap what you sow.

 

[Gallbaro]

It gets even better! NBC just announced that the bailout money that went to banks (which the above Citigroup is part of), was blown on of all things, paying for limousine services! Glad to see the banks are doing what needs to be done with the taxpayers money that's supposed to be used to save them from this mess.

Limousine Service =/ Stretch Limousines and chauffeurs.
It means cab service and FOTB cabbies.


You and the media clearly have no clue of what you speak. What is defined as a limousine service by these companies is a black Lincoln Towncar, just a call up cab service that these banks have accounts with.

They use these cab services because often times their employees work insane hours, hours where they no longer consider public transit a time efficient or safe mode of transportation, so they have contract cab services to get their employees home.

 

[Minsc]

Limousine Service =/ Stretch Limousines and chauffeurs.
It means cab service and FOTB cabbies.


You and the media clearly have no clue of what you speak. What is defined as a limousine service by these companies is a black Lincoln Towncar, just a call up cab service that these banks have accounts with.

They use these cab services because often times their employees work insane hours, hours where they no longer consider public transit a time efficient or safe mode of transportation, so they have contract cab services to get their employees home.

Whatever it means, they had a picture of a really expensive, shiny ass, black stretch something on the teaser for the story.

Besides, the real point is this money for the bail out, the 700 billion $, is being wasted. Already like 70 billion is lost, and close to 300 billion unaccounted for.

 

[Minsc]

Looks like I was right and wrong. The ad played again, the story is at 11 pm. They said specifically limousines, not limo services. And it was said that you "won't believe how the banks used the bailout money behind your backs on sleek stretch limousines" or something close to that.

 

[Phoenix]

Before this burst over half of GE's income came from its finance department, it has significant amount of unpaid obligations and lives off of corporate paper.

They are screwed.

When you have 48 billion dollars in actual cash - how are you living off corporate paper?

 

[lostzenfound]

Here's my question. I'm poor and I've never owned stock before. If the banks don't get nationalized, is there no reason to not buy 100 or 150 shares of Citi?

I mean, if it nationalizes I lose it, and I'm out $150, which isn't great news but nothing that will kill me. But, if within three or four years Citi makes it back to 50 a share, I'm up like $6000.

It just seems silly not to try.