Posted by: bigtalksingapore | November 24, 2008

Citigroup is in lots of trouble

US Government announced plan to save Citigroup with a $20 Billion package (See Attachment #1).

Looks like Citigroup and Citibank are in lots of shits.

And I received an email today from Citibank CEO Jonathan Larsen (Suddenly) trying to assure customers that the bank is still safe (See Attachment #2 & #4).

Sometime, the more they try to assure you, the more you feel something is amiss.

If you got any investment in Citigroup and Citibank that is not guaranteed by Singapore Government, you should seriously consider taking a closer look.

I remembered seeing an article in CBS News “60 Minutes” recently (On 26 Oct 2008).
It talked about a new crisis that US is facing that is probably as big as the “Sub Prime” crisis.
They called it “Credit Default Swap” (See Attachment #3).

What it meant is that during the bank golden time, many banks and financial company created a kind of betting system where people can come in to place bets.
In this case, lots of betting was done on whether people will default on their mortgages.
And as the “Sub Prime” crisis unfold, it looks like many banks and financial company are losing their bet.

Could this be the reason why Citigroup is going down under ?
I don’t know, we may never get the real picture.

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Attachment #1: News cutting from CBS News website (Click here).
20081124b1_usgovernmentannounce20btosavecitigroup_cbsnews

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Attachment #2: Letter from Citibank CEO20081124d1_letterfromcitibankceo

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Attachment #3: News cutting from CBS News (Click here)
20081124c1_wallstreet2ndcrisiscreditdefaultswap_cbsnews

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Attachment #4: Another Letter from Citibank CEO
20081124d2_letterfromcitibankceo

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