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Citigroup (C) shareholder Prince Alwaleed urges the U.S. to sell its stake in the bank ASAP: "We...

Citigroup (C) shareholder Prince Alwaleed urges the U.S. to sell its stake in the bank ASAP: "We need to give confidence back to the shareholders and investors that these companies are moving along without government support."
Comments (8)
  • Archman Investor
    , contributor
    Comments (2651) | Send Message
     
    << "We need to give confidence back to the shareholders and investors that these companies are moving along without government support.">>

     

    With so much toxic crap on and off this company's balance sheet does anyone really believe for a second they could survive without government support? This does not even include the massive wave of further credit, mortgage, commercial mortgage (all levered to the hilt) coming down the pike thru 2012.

     

    Sounds like Mr. Alwaleed is trying to give the perception that everything is a-ok at Citigroup, when in reality it is not. Maybe to goose the stock price seeing as he lost 98% of his investment over the past year.

     

    C is insolvent.

     

    Some of us took the red pill and are unplugged from this Matrix of lies that is Wall Street and the financial media.

     

    compdivplan.com
    4 Oct 2009, 08:47 AM Reply Like
  • tripleblack
    , contributor
    Comments (13589) | Send Message
     
    I am all for the treasury selling off their holdings in the TARP recipients, including C, GM, AIG, and whoever.

     

    I would suggest that it be done in an orderly manner, to maximize the return for the taxpayer. Having done something stupid to get into trouble in some of these cases, let's at least extricate ourselves in a somewhat intelligent fashion. Sure, we will probably never see much of that money again, but going ultra-long doing the wrong thing for the wrong reasons is not the answer.
    4 Oct 2009, 09:27 AM Reply Like
  • Tack
    , contributor
    Comments (14293) | Send Message
     
    If I hear the code-word, "toxic," one more time, I'm going to puke.

     

    If anybody takes time to check the valuations of various classes debt assets (www.mlindex.ml.com/GIS...) they will see that the market valuations of mortgages and other debt and trending higher each month. Not that the contrived mark-to-market values ever represented reality, but, even if they did, they're all recovering. This means that the supposed "gap" between model valuations and supposed "market" valuations is narrowing constantly. At the same time, banks and other lenders have built sizable reserves, many of which could eventually be reversed directly back into profits.

     

    In essence, the paper "solvency" debate is going to melt away, all by itself.

     

    Lastly, the banks are currently sitting on the largest cash hoard in history, and as the balance sheets continue to improve, they will find themselves overcapitalized. At that point, one of two things will occur: 1) either they will begin to flood the market will new lending, possibly fueling inflation, or 2) the Fed will have to start withdrawing funds to prevent #1.
    4 Oct 2009, 09:39 AM Reply Like
  • bottoms-up
    , contributor
    Comments (464) | Send Message
     
    Prince Alwaleed used to be called the Oracle of Saudi Arabia now they just call him a horse's a**.

     

    I read a report that many of these countries are in the Middle East are under tremendous pressure to stop what is known as "name lending." It is the act of giving $million or $billions based only on ones name or family -- this in spite of the fact many of these people, through years of inbreeding, have more problems than you can imagine.

     

    I used to live in the Middle East and what goes on there financially is something to behold.

     

    Just the fact that Prince Alwaleed has his fingers in the pie gives me cause for great concern and Archman Investor is right on the mark about his observation that this is nothing but something to give everyone the impression that every thing is fine at C, when they are, in fact, insolvent and nothing more or less than a black hole.

     

    I guess Prince Alwaleed shouldn't worry, if the U.S. Government doesn't do what he says they'll pout and threaten to cut off our oil or send another OBL to get us for something or other.

     

    In my perception much of this propping-up of absolutely worthless institutions is done because of threats from big player investors in the Middle East and Asia. Don't forget how nervous Ben and Paul were when they would come out with the latest bailouts on Sunday before the markets opened in Asia a year ago; they looked like their life depended on it. I think it did.
    4 Oct 2009, 09:48 AM Reply Like
  • Archman Investor
    , contributor
    Comments (2651) | Send Message
     
    Tack:
    Listen, I respect all opinions. But toxic is toxic. There is no rationalizing a bad situation. That link you provide is to none other than Bank of America/ Merrill Lynch. Do you really think that BAC is going to say anything negative about valuations, mortgages et al, when then rely heavily on gathering assets from unsuspecting Americans in order to make money off those assets under management? That is assuming of course that any data they put out is at all even reliable. With the massive corruption on Wall Street, our government, and even our regulatory agencies, one cannot trust, in my opinion, most information that these "companies" put out there.

     

    The banks, Wall Street, and the stock market have "improved" not for all the right reasons, but simply because the government has given them a trillion bucks to have a good time with. You are right, banks "are" sitting on massive cash hoards (of taxpayer money) because they themselves know they are all one month away from bankruptcy. The God awful employment picture (the real numbers not the Tout TV numbers) confirm to the banks they have to keep that cash. Mortgage defaults, credit defaults, consumer defaults of all kinds are still soaring. Consumer debt is still on average 122% of their household balance sheet.

     

    Yes, the stock market is up, but simply because that is where all this bank and investment bank money has gone. They figure, well since the average American is not a good investment anymore, might as well drive the stock market up 50% off the lows and make some money for ourselves, and that is exactly what they did.

     

    Heck, as I have stated many times, I was lucky enough to get in at S & P 700, and lately have taken some off.

     

    All other data aside, the one thing that will start to make me feel better, and I think will truly get the banks lending again, is that unemployment has to start falling hard, and real jobs have to be created. Some like to call it a "lagging indicator", but so what? I think it is the one indicator that must improve, so consumers in this country can manage their debts, pay them off, etc.

     

    The we can all start feeling better....maybe.
    4 Oct 2009, 09:57 AM Reply Like
  • davidbdc
    , contributor
    Comments (3183) | Send Message
     
    Hey if the Prince thinks Citi is doing great - then lets sell it all to him!! What did we put in ? 55 Billion.....so we will sell the entire US governments stake for $62 Billion (hey we have to make a small profit here as we all know AIG is dead money).

     

    Just send the check to the US Treasury Prince and we'll send out those stock certificates the same day - heck, Obama might be willing to deliver them personally via Air Force One!!
    4 Oct 2009, 10:34 AM Reply Like
  • Tack
    , contributor
    Comments (14293) | Send Message
     
    The ML site is merely a collection of known industry indices, so unless your conjuring up some huge conspiracy theory, where all these indices on that site are falsely reported, then, you'll just have to accept the data at face value. It doesn't serve an intelligent discussion of real data to merely try to suggest it's invalid, if you don't like what it says.

     

    The government provided massive liquidity to a market that was totally paralyzed. The alternative would have been for the financial system to totally collapse, probably leading to a worldwide depression of unimaginable magnitude. That, of course, is what some should say should have been allowed to occur, but, it's easy to make such self-righteous pronouncements from the comfy confines within which all modern observers now live, versus the utter despair and misery that accompanied the last genuine financial meltdown in the '30's. Few alive today have any real grasp of hardship.

     

    The key to having a good outcome from the government largesse is for them to withdraw the funds systematically, as things get better, and they will get better. This, of course, is a challenge for any and all politicians, who are so good at "giving," but less so at dispensing medicine. If they fail, we'll have soaring inflation, but under no scenario that I can see will we have extended deflation.

     

    There's constant criticism about the banks "not lending," but, much of this conveniently ignores the fact that businesses and consumers have been paying down debt, not demanding more. Sure, we get the media heart-bleed stories about this poor guy or that poor business that can't get a loan, but, systemically, demand for debt has been declining, not increasing, so it's impossible to expand lending in such an environment.

     

    Bank lending will not follow improved employment; it will precede it. And, what will get the banks expanding lending again? The bank's balance sheets will continue to improve, the 90% of people with jobs will have to decide to climb out from under their pillows and spend some money, again, and businesses will have to invest to replace inventories and increase their future efficiencies.

     

    In summary, the whole notion that "this time is different," and the world is ending, never to recover, just denies all of history and will deprive those adopting such views of any success during the inevitable recovery process.

     

    On Oct 04 09:57 AM Archman Investor wrote:

     

    > Tack:
    > Listen, I respect all opinions. But toxic is toxic. There is no rationalizing
    > a bad situation. That link you provide is to none other than Bank
    > of America/ Merrill Lynch. Do you really think that BAC is going
    > to say anything negative about valuations, mortgages et al, when
    > then rely heavily on gathering assets from unsuspecting Americans
    > in order to make money off those assets under management? That is
    > assuming of course that any data they put out is at all even reliable.
    > With the massive corruption on Wall Street, our government, and even
    > our regulatory agencies, one cannot trust, in my opinion, most information
    > that these "companies" put out there.
    >
    > The banks, Wall Street, and the stock market have "improved" not
    > for all the right reasons, but simply because the government has
    > given them a trillion bucks to have a good time with. You are right,
    > banks "are" sitting on massive cash hoards (of taxpayer money) because
    > they themselves know they are all one month away from bankruptcy.
    > The God awful employment picture (the real numbers not the Tout TV
    > numbers) confirm to the banks they have to keep that cash. Mortgage
    > defaults, credit defaults, consumer defaults of all kinds are still
    > soaring. Consumer debt is still on average 122% of their household
    > balance sheet.
    >
    > Yes, the stock market is up, but simply because that is where all
    > this bank and investment bank money has gone. They figure, well since
    > the average American is not a good investment anymore, might as well
    > drive the stock market up 50% off the lows and make some money for
    > ourselves, and that is exactly what they did.
    >
    > Heck, as I have stated many times, I was lucky enough to get in at
    > S &amp; P 700, and lately have taken some off.
    >
    > All other data aside, the one thing that will start to make me feel
    > better, and I think will truly get the banks lending again, is that
    > unemployment has to start falling hard, and real jobs have to be
    > created. Some like to call it a "lagging indicator", but so what?
    > I think it is the one indicator that must improve, so consumers in
    > this country can manage their debts, pay them off, etc.
    >
    > The we can all start feeling better....maybe.
    4 Oct 2009, 10:40 AM Reply Like
  • Linus Wilson
    , contributor
    Comments (207) | Send Message
     
    I take the urging of the Prince for taxpayers to sell their stake as better news than if the Prince asked taxpayers to buy his stake. Perhaps he would like to buy a large piece of taxpayers' 34 percent stake in Citigroup?
    4 Oct 2009, 03:26 PM Reply Like
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