22 Nov Citi never sleeps

Citibank may just goes to Zero next week. A bank with 2 Trillion Dollar assets, with more capital than current debt level warrants. Why ?

It is all political and racism.

Viky himself is not a white, and there are power struggle within the organisation to replace him. There are lots to aspire to CEO position of a company with global reach and 2 Trillion Dollars in assets. One would not exclude the possibility of a Citi insider collabrating with Hedge Funds to drive Viky to his knees.

Citi is one of the most global company in US. It has more branches in Asia than any other US banks, namly BoA, JP Morgan. Its executives in Asia are the brightest brains in the society. And its business model covers all aspects of consumer banking needs, car financing, home loans, wealth management, etc. 2 days ago, I was just contacted by Citi sales to renew my car insurance, and was handed a pocket book size Citi calender for 2009 on a busy street. Only HSBC has as a global reach as Citi, and HSBC is only half as agressive.

A bankrupt Citibank has immense ramificaitons on the local banking scene in those Asia countries, it may precipitate bank run on other banks.

Citi has some prominant backers, namly the Prince Allweep, Dubai investment and the Singpure government investment arm Temaseek.

Citi, has long been the target of hedge funds in their hunt. As all of us know by now, Hedge Funds purchase CDS on the target, drive the prices higher, to precipitate a fall in stocks, then higher CDS, cascading into an avalanche.

Talks on caging this CDS monster has not been forthcoming. Viky has been asking for a reinstatement of the Uptick Rule, it has not happened.

Hence it is all political. Never forgetting that Hanky has been a trader. His traits of switching out of the backing of mortgages is refletive of trader behaviour. His original intention of 700B fund was to shock the market, however the effect was lost when Congress stall it.

The entire US financial market is mired in a web of politics, lobbying and self interests.

At the recent G20, China has hinted at a diversification from the US currency, while acknowledging that it itself is very much at stake.

Back to Citi, it is little semblance that the more international companies like AIG and Citi with good Asian assets becomming the prey. If they have nothing good, the vultures would have pass it off.

Now is time for Geithner to show his prowess again, and establish his credibility by leveraging on an joint international effort to shock the short sellers away.

It is time to enact the Patriotism Act to restore order. Such financial terrorism is even more severe than the criminal act of terrorist. Short selling funds taking advantage of the bad economy to sow the seeds of fear.

The obstacle to retoring the market is to identify the insiders in the establishment with short selling interest. Afterall, the market is made out of human, not God.

I propose:
(a) Restoring the uptick rule with immediate effect when market opens on Monday
(b) Reaffirming the intent to regulate the CDS market with a planned exchange starting in early 2009, and full disclosures of CDS by all participants with immediate effect
(c) Treausry to resume purchasing bad mortgages on a case-by-case basis, with Citibank as the first candidate. Rid it of all the bad mortgages.
(d) Treasury to rally international SWF to establish a fund to buy failing bank assets. (as what the Swiss government did with UBS).
(e) Expand FBI and FED power to investigage collusion of company insiders with short selling Hedge Funds.

As for the Autos, I propose:
(a) Merging Chrysler into General Motor.
(b) Negotiate with the Unions to retire 20% of the workforce.
(c) Selling overseas plants to Japanese car makers.
(d) Government to guarantee bonds issues by the Auto companies
(e) All Auto top execs to step down

In no means I am offering myself as the next Treasury Undersectreary for financial markets. Thank you.