Citigroup's Not In The Clear Yet
Analysts at Goldman Sachs said they expect additional write-downs of about US$1 billion to US$12 billion each for several major United States brokers in the first quarter, with Citigroup forecast to record the highest write-down of about US$12 billion. Citigroup according to many, has not been as aggressive as many of its peers in marking down the value of assets such as residential mortgage-backed securities, commercial mortgage-backed securities and leveraged loans.
The analyst who got things right before the sxxx hit the fan, Meredith Whitney, (the Oppenheimer & Company banking analyst), reduced her 2008 earnings estimate for Citigroup by 70 percent on Monday. She also said the bank needs to sell as much a US$100 billion in assets to shore up its balance sheet.
In addition to their financial problems, guide, Citigroup’s board still did not appear to learn from past mistakes. In Vikram Pandit, the board has chosen someone just like Chuck Prince in that both have:
No banking experience;
No lending experience;
No CEO experience;
No management track record;