Results tagged “citigroup”

Main St. v. Wall St.! Some New Yorkers are up in arms upon finding out that Citigroup and Goldman Sachs have received numerous doses of the much-coveted H1N1 vaccine. The two banks each received a several hundred doses for at-risk employees (pregnant women, etc...), but the city's Health Department has had to explain themselves to citizens who believe companies shouldn't get preferential treatment over people waiting in line for the vaccine. "Wall Street banks have already taken so much from us," union official John VanDeventer wrote on the Service Employees International Union website, "But they should not be allowed to take away our health and well-being."

The 2009 Mets will wrap up their season next Sunday and mercifully put an end to a campaign that everyone will try and forget. But, before we bid these Mets goodbye, it’s worth wondering, why did the season fall apart so badly? Sure there were injuries at an amazing rate, but what caused those injuries? Perhaps you could say that the team was cursed?

Hey, hey: The Wall Street Journal reports, "Citigroup Inc. has told about five former top executives that it won't pay them tens of millions of dollars in promised severance payouts, according to people familiar with the matter." While Citi has already paid "more than half of the roughly $100 million it promised to the former executives..company officials recently decided not to proceed with the remaining payments, concluding that they wanted to avoid even the possibility of a public backlash over the money." The U.S. government has aided Citigroup with $50 billion. While the former employees' contracts with Citi require the company to pay out the severances, the WSJ explains, "bank officials essentially are wagering that the former executives will conclude that it would be publicly embarrassing for them to file lawsuits against the struggling, taxpayer-backed company seeking the money."

Citigroup board chairman Richard Parsons really has a full slate. Besides trying to shepherd the troubled financial giant through the economic crisis, the Daily News reports that he "was also wrestling with a personal crisis - how to tell his wife and three children he has fathered a child with another woman." Parsons, 61, and MacDella Cooper, 32, a model, are the parents of a baby girl born last August. They apparently met through her charitable foundation which provides education and food to abandoned and orphaned children in Liberia. Cooper told the News, "My private life is private. I'm sure you can draw your own conclusions." And Parsons, once touted as a possible candidate for Mayor (if Bloomberg didn't get his way with term limits), only said, "This is a private matter, and I prefer not to talk about it at this time."

According to the Wall Street Journal, "Regulators have told Bank of America Corp. and Citigroup Inc. that the banks may need to raise more capital based on early results of the government's so-called stress tests of lenders, according to people familiar with the situation." The extra capital would be a "buffer" in case the banks' losses continue to grow. Apparently both banks are trying to develop arguments disputing the findings (for instance, BoA's shortfall is in the billions). The AP points out that, for the Treasury, "the easiest way to bolster bank balance sheets is to convert the government's existing stake from preferred shares — a form of debt — into common shares that carry voting rights." Last week, the federal government said capital needs weren't necessariy a measure of "current solvency or viability of the firm," but worries, coupled with swine flu concerns, have sent stock futures down.

Feel better, American taxpayers: Citigroup, which received $45 billion in bailout money, has reported a first quarter profit of $1.6 billion. However, Dealbook reports, "The earnings were helped by an accounting change that allowed the bank to post a one-time gain of $2.5 billion... Under the rule, companies are allowed to record any declines in the market value of their debt as an unrealized gain." ( You may remember that besides a $20 billion infusion from the government in November, it was only in February when the U.S. increased its stake in Citi to about 36%.) Some analysts are still worried about the financial firm's ability to retain top executives as well as their credit-default swaps. Citi's stock is up in pre-market trading.

After a memo from Citigroup CEO Vikram Pandit saying that the company was profitable in 2009 (thus far), the bank's stock is up 27% to...$1.34! But that news is enough to help other bank stocks rally and the Dow is up by about 250 points. Pandit said of Citigroup, which did receive $45 billion in TARP bailout money, "We are profitable through the first two months of 2009 and are having our best quarter-to-date performance since the third quarter of 2007." But he did add he was disappointed in the company's low stock price. Additionally, the Wall Street Journal reports, "U.S. officials are examining what fresh steps they might need to take to stabilize the [Citigroup] if its problems mount."

Also: Tomorrow's economic data could trigger a big sell-off.

The United State government has agreed to increase its stake in embattled Citigroup from 8% to 36%. The NY Times explains, "Under the deal, Citibank said that it would offer to exchange common stock for up to $27.5 billion of its existing preferred securities and trust preferred securities at a conversion price of $3.25 a share, a 32 percent premium over Thursday’s closing price. The government will match this exchange up to a maximum of $25 billion of its preferred stock at the same price. In its statement, the Treasury Department said the dollar-for-dollar match was intended to strengthen Citigroup’s capital base." Still, Citi's shares plunged—Canaccord Adams managing director of U.S. equity trading David Rovelli told Bloomberg TV, "It’s just unbelievable. The government is making up the rules as they go. A continued breakup is probably in the cards." And former SEC chairman Arthur Levitt added, “This is another step toward creeping nationalization." Currently, the Dow is close to 7,000 points.

Citigroup is in talks with U.S. officials for the government to take more of a stake in the troubled financial giant. The Wall Street Journal reports, "While the discussions could fall apart, the government could wind up holding as much as 40% of Citigroup's common stock. Bank executives hope the stake will be closer to 25%," according to sources. Also: "Any such move would give federal officials far greater influence over one of the world's largest financial institutions." But some analysts think that the government might need to do more to really stabilize Citi. And while overseas stocks rallied over that bit of news, the U.S. stock markets's bank rally was cut short with news about tech sector weakness. Who knows what will happen this week, as President Obama discusses tax cuts and cutting the deficit.

J.P. Morgan and Citigroup will not foreclose on homes for a little while, acting on Rep. Barney Frank's suggestion of a foreclosure moratorium earlier this week. According to the AP, J.P. Morgan CEO Jamie Dimon sent a letter of his company's intentions to stop new foreclosures on owner-occupied homes through March 6 while Citigroup will halt their "principle residence" foreclosures till March 12—which is about the time the Obama administration hopes to have clarity on its foreclosure prevention plan. Dimon wrote in his letter, "We stand ready to work with you to put the appropriate processes in place, including a national modification standard, to reduce the incidence of foreclosure and to encourage long-term, sustainable home mortgages."

Consider those Wall Street Journal-fueled hopes that CitiField would be something else , as both the Mets and CitiGroup say they are going ahead with their $400 million, 20-year agreement. Mets VP of business affairs David Howard tells Newsday, "The Wall Street Journal got it wrong. Citi contacted us this morning and they reinforced that they will honor the legally binding agreement that they have with us. They have consistently said to us that they will honor the agreement." And Citi released a statement, "Citi signed a legally binding agreement with the New York Mets in 2006. No TARP [Troubled Asset Relief Program] capital will be used for Citi Field or for marketing purposes." And yesterday, Howard explained to Newsday, "Superficially, I understand [the public's reaction. But the reality is, the TARP recipients were companies the federal government thought were vital to our economy. To continue doing business, they still need to advertise."

Is common sense coming to Queens? Not yet, but at least Citigroup is considering terminating the naming-rights deal it signed with the Mets in 2006. While no official decision has been made, the fact that this is even under consideration represents a dramatic change in thinking. The deal has been under attack for the past few months as Citigroup has been forced to rely on taxpayer money to stay in business. In a letter to Treasury Secretary Timothy Geithner, two Congressmen called on the bank to end their deal with the Mets saying, "Citigroup is now dependent on the support of the federal government for its survival as an institution. As such, we do not believe Citigroup ought to spend $400 million to name a stadium at the same time that they accept over $350 billion in taxpayer support and guarantees." The Mets are still planning on keeping the deal, "The Mets are fully committed to our contract with Citi." If the deal is terminated, it would be the second big financial blow that the Wilpons, owners of the Mets, have suffered. They also lost millions in the Bernie Madoff scandal.

After the NY Post's outraged article on how CitiGroup was buying a $50 million corporate jet, politicians joined the chorus over how the banking giant is not really thinking straight. President Obama's press secretary Robert Gibbs said the president "doesn't believe [business jets are the] best use of money." Especially when CitiGroup is getting $45 billion in TARP funds, right?

Citigroup, which was bailed out by the government last fall to the tune of $45 billion, is continuing on with its purchase of a new, $50 million corporate jet, according to the Post, which calls it "JUST PLANE DESPICABLE." Sure, the banking giant announced it would cut up to 50,000 jobs and posted a staggering $8.29 billion loss last quarter, but executives need to get places faster, you know? But only up to 12 executives, because that's all the Dassault Falcon 7X seats. A source tells the Post that "It's not uncommon for large companies to pay a deposit on a new plane then cancel the order before delivery," so when the Post asked the head of CitiFlight about the 7X, he said, "Why should I help you when what you write will be used to the detriment of our company?" Citi trying to sell its older Dassault jets.

Banking giant Citigroup announced its fifth straight quarterly loss—this time, it's $8.29 billion—and described plans to restructure. The NY Times reports, "Citigroup confirmed that it would divide, for management purposes, into two separate businesses — Citicorp and Citi Holdings," and the company's statement read, "We are setting out a clear road map to restore profitability and enable us to focus on maximizing the value of Citi." CEO Vikram Pandit added, "Our results continued to be depressed by an unprecedented dislocation in capital markets and a weak economy."

Late yesterday, Citigroup announced it would merge its Smith Barney brokerage unit with Morgan Stanley. Bloomberg News reports, "The venture, which New York-based Morgan Stanley will control with a 51 percent stake, would employ 20,390 brokers in more than 1,000 branches." However, it's unclear whether they will be able to retain those brokers: MS co-president James Gorman said, "Will there be financial-adviser attrition? That’s possible. It’s obviously a hot recruiting market out there." (It is?) And the jury is still out on whether the venture will help the ailing Citigroup, which expects losses of $10 billion for the 4th quarter.

    

The Mets offered a tour of their new under-construction stadium today and COO Jeff Wilpon dashed the hopes of those wishing the stadium would be named Citi/Taxpayer Field. Wilpon referred to Citigroup, the troubled bank which is paying $20 million/year for 20 years for naming rights, "We think we can bring the right people to help them market their product so that they can be a going concern. It's not really Citi's fault that they're in this problem. They're a lot of other banks in the same situation."

Perhaps inspired by yesterday's NY Post cartoon by Delonas, featuring Mr. Met watch CitField's name changed to Taxpayer Bailout Field, two politicians from State Island are proposing that Citifield be named Citi/Taxpayer Field. Because what better way than to pay tribute to Citigroup's $400 million investment in the Mets' new home, now that taxpayers are on the hook for about $350 billion with the Citi bailout.

With the feds coming to Citigroup's rescue with a $20 billion investment and $300+ billion in asset-backing (not to mention the $25 billion it got from the first $700 billion bailout), the NY Post calls for the heads of Citi's board. With a graphic detailing board members and their compensation, the Post writes, "Blame abounds, but most of it must accrue to the Citigroup directors - the men and women paid well to make corporate policy, and to oversee its proper execution... At best, they snoozed through the company's massive build-up of bad debt and rancid security instruments," with many shots aimed at former Treasury Secretary Robert Rubin, who has made $107 million from Citi since 1999. Related: The NY Times's "Saving Cit May Create More Fear" article notes the new bailout might "encourage banks to take more risks in the belief that the government will step in if they run into trouble."

As his successor unveil his economic team, President Bush, alongside Treasury Secretary Henry Pauslon, spoke to reporters about the Citigroup bailout. Bush said the bailout, which he approved last night while flying back from his APEC meeting, was needed to "safeguard the financial system." He added, "We have made these kind of decisions in the past. We made one last night. And if need be we will make these kind of decisions to safeguard our financial system in the future." The White House deputy press secretary Dana Fratto later said, "We would never foreshadow any specific actions involving private firms, but I think it’s safe to say ... that we take threats to our financial system seriously and we stand ready to take any steps necessary to prevent systemic events in our economy."

Update: Here's the government's bailout plan for Citigroup: The government will invest $20 billion directly into Citigroup while also backing $306 billion in loans and securities (the Times says the plan is "complex"). In return, Bloomberg News says the government gets "$27 billion of preferred shares paying an 8 percent dividend."

News that the federal government will help bail out Citigroupseems to be reassuring investors as futures are up before today's trading. CNBC reports that Citi's shares "jumped over 30% in pre-market trading" (last week it lost 60% of its value) while other bank stocks, like JPMorgan Chase and Goldman Sachs are also up. Also a source of some positive sentiment: News about President-elect Obama's economic team--Timothy Geithner for Treasury Secretary and Lawrence Summers for the National Economic Council-- and economic stimulus plan.

With Citgroup in serious trouble of being taken over as stock prices continue to plummet, will Citi Field, the Mets' new stadium set to open next year, still have its name by Opening Day? Citigroup's deal with the Mets calls for the financial company to pay the team $20 million annually for the name. The Hoston Astros were still playing in Enron Field when the company went bankrupt and was mired in an enormous scandal. But with other financial giants lining up as potential Citigroup suitors, could Queens become home to Goldman Sachs Stadium? It seemed that New Yorkers' ability to pretend it was called "City Field" softened the blow of the town's first major corporate handle for a hometown team's digs. Maybe now we'll just have to pride in not being San Diego, a city saddled with the Jenny Craig Pavilion.

After yesterday's 5+% loss on Wall Street, Dow futures gained about 200 points, according to CNBC, but one trader said, "At best we might see a day or two of further rebounds, but as we've seen in the past after a big rally it always comes off, it's always met with skepticism... People are being spooked out of positions instead of thinking rationally."

Crain's says that Citigroup's announced 52,000-employee reduction is the "second-largest job cut ever undertaken by any company." (The largest one is from 1993, when IBM let go of 60,000.) Citigroup's job cuts--which many don't think are enough given its current condition--are global and some will be through asset sales (about half are layoffs). But Citi is NYC's "second-largest" employer "behind only the New York-Presbyterian Healthcare System," according to Crain's.

There will probably be more sad guys on trading floors today: Stock futures are showing sharp declines, in part due to news that Citigroup may eliminate 50,000 people (or 14%) of its global workforce, mostly by selling assets. And Britain's Sunday Telegraph reports that JPMorgan Chase will have cut thousands of jobs next year. In the auto industry, which hopes for some government help, cash-strapped GM is selling back a 3% stake in Suzuki to raise $232 million. Referring the futures and prospects for today, City Index's chief market strategist told CNBC, "This baby is going down and it's going down fast. I see no reason for anyone picking up the baton this morning."

Citigroup may have gotten a NY judge to block Wells Fargo from taking over Wachovia on Saturday, but that was overturned by an appellate court judge yesterday! Apparently a NY judge can't issue an order from outside of NY--and the judge was in Connecticut at the time (it's like a mistake that would happen on Law & Order!). The NY Times' Dealbook tries to explain the lawsuits piling up--Citigroup is suing Well Fargo for interfering with its federally-arranged $2+ billion purchase of Wachovia, while now Wachovia is suing Citigroup claiming that their agreement is not exlusive and its can purse the $15+ billion offer from Wells Fargo. Bloomberg News reports that squabble could mean Wachovia gets split up between Citigroup and Wells.

The NY Times reports that Citigroup says it "persuaded a New York judge to temporarily block Wells Fargo from acquiring Wachovia." Wells Fargo's $15 billion deal was announced on Friday, surprising Citigroup which had worked with the feds to acquired Wachovia for $2.2 billion. Citigroup says their agreement prohibited Wachovia from any other discussions until after October 6 but Wachovia spokesperson said its Wells deal is "proper, valid and is in the best interest of shareholders, employees and the American taxpayers. Under that agreement, Citigroup is always free to make a superior offer to Wachovia." Wells' chairman further emphasized, "The taxpayer doesn't pay a penny." Oh, and the TImes's source said, "Citigroup was seeking $60 billion in damages from Wells Fargo for interfering with the initial transaction."

Forget the federally-backed deal for Citigroup to buy Wachovia, because now Wells Fargo will take over Wachovia for $15.4 billion--and the Wall Street Journal says it won't require any government assistance. Earlier this week, Wachovia agreed to sell its banking operations to Citigroup," and the FDIC would have been responsible for any potential loan losses. Bell Rock Captial CIO Cassandra Toroian told CNBC, "For Citigroup, this is a real loss...this was a deal that was going to save them as much as it was saving Wachovia," while Wachovia was "smart" and is getting a "better deal."