Citibank … cutting jobs is not enough
Citibank still thinks, it can make things turn around by cutting jobs and slash costs …
They might be EXTREMELY WRONG!!!
They have to DELEVERAGE!!!
WSJ today has some figures, which should make you scared!!!
- Tangible assets, which don’t include goodwill or intangibles, are 55 times the bank’s tangible equity. J.P. Morgan Chase, by contrast, is 31.4 times, while Bank of America is 31.3.
- Tangible assets rise to nearly 59 times tangible equity if Citi has to bring about $120 billion in credit-card assets back onto its books in 2010, as is likely.
- Citi also may have to consolidate some of the roughly $670 billion in mortgage assets currently held by off-balance-sheet vehicles. If the bank had to consolidate just 20% of these mortgage assets, tangible assets would rise to about 63 times tangible equity.
So it is still a HIGH RISK STOCK … despite trading now in the SINGLE DIGITS …
Remember … there is always a reason behind the CHEAPNESS of stocks 
Tags: Citibank, deleveraging
