Citigroup Begs for More Money, Again

In the Citigroup, Bank of America: Prisoner's Dilemma, Electronic Bank Runs and Nationalization I wrote:

"Citigroup (C) declined 61% from a peak of $4.10 to an intraday low of $1.61 over just 10 trading days. Bluntly put: Citigroup is dead.

Bank of America (BAC) declined 64% from a peak of $7.05 to an intraday low of $2.53 over just 10 trading days. Bluntly put: Bank of America is dead.

Dead actually means dead. It is unlikely they can survive the weekend... and if they do, they most definitely cannot survive the week."

News is slowly leaking out that Citigroup is desperately scrambling for some kind of additional government money.

Citigroup in Talks That May Raise Government's Stake, WSJ Says: "Citigroup Inc. is in talks with federal officials that may increase the government's ownership of the bank, the Wall Street Journal said, citing unidentified people familiar with the situation.

The government may end up holding as much as 40 percent of Citigroup's common stock, while bank executives prefer the stake to be closer to 25 percent, the report said."

To be honest. I don't see the point. With a market cap of about $10 billion as of Friday's closing price, even a 40% stake would be about $4 billion. That kind of money won't last more than a quarter... especially if it is paid out in bonuses...

Therefore, despite wide spread opposition Citigroup will eventually get nationalized... or pre-privatized... or whatever 'politically correct' term is invented to cover up the fact that complete and utter failure is being rewarded.