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...disagreement concerning the fundamental values of the U.S. money center banks. It has become a sign of sophistication for an institutional stock picker to say that a company's stock value is zero. Recently, there have been research notes that say that GM (GM) is worth zero, and that Citi is. Saying something is worth zero is too easy. Most analysts have to give a range of prices and reasons for their upper and lower targets for share value forecasts. Saying something is worth zero is cheating. It takes away any meaningful analysis of the worst case. Stock prices never...
...Citigroup trades at $2.72 now. All the harsh talk from bank analysts pushed the stock down by less than 5% yesterday. That means a lot of investors gave the alarmists little credence. Maybe they want to see Citi's first quarter earnings before they decide what the bank is worth. Since the stock is down from over $55 less than two years ago, no one is assuming that the bank is going to earn billions of dollars for the quarter. The question is probably how few billion it will lose...
...example, has about $850 billion in special purpose entities. That means to reincorporate those assets by the end of this year, Citigroup will have to come up with $42 billion in new capital - money that will have to come from Uncle Sam, which could further dilute the value of Citi's shares...
Shafir joined Citi last October from Lehman Brothers, shortly after that firm went bankrupt. Shafir says he in no way regrets the move, and has no plans to leave Citi anytime soon. "I'm here because I want to be," says Shafir. "I am very proud of this place...
...Lost in the argument about why there was not risk management in place when a bank like Citigroup moved to the brink of collapse was the fact that Citigroup had a committee of its board of directors charged with monitoring the risks taken by the bank. Citi also had an army of risk managers who probably reported to an executive who also ran a part of the company that was taking risks. Of course, it is fair to assume that the bank also had a chief financial officer who had an excellent idea of what Citi had on its balance...