US Banks under pressure

[Uncle Festivus]

Not sure if it's genuine but apparently a customer advisory has been sent out, that Citibank has placed limits on withdrawals, both via wire withdrawals and from New York ATM's (from a scamming scheme??). Could be nothing.

Not sure if the Fed will allow a run on the US banking system without some form of intervention, even if it doesn't become public knowledge to prevent a run, similar to Northern Rock?

 

[dhukka]

Interesting rumour Unc, care to share the source?

 

[Uncle Festivus]

Yes, forgot the link, can't confirm otherwise.

http://www.dailyreckoning.com.au/citibank-trouble/2008/01/07/

 

[dhukka]

Yeah it's a pity there is no source in the Daily Reckoning post either. Could have been just what they said, a fraud protection measure. Interesting timing though, the biggest strain on ATM's is around Christmas / New Year. Seems to be the worst time for banks to be putting restrictions on withdrawls and transfers.

 

[KIWIKARLOS]

mate if I thought that story had any ounce of truth to it i would be down at my bank withdrawing all my funds

If the biggest bank in the world starts limiting withdrawals and has a run on it we are all screwed :

 

[ithatheekret]

Boy if Citi has wound up standing in knee high crap , then Merrill must be upto their necks in it .

Citi can be compared to the size of BHP versus RIO , where RIO is the smaller player .

If we start seeing more bad news on Merrill , I will avoid US financial stocks fullstop for a few years .....................

The only financial stocks then for viewing prospects , would be at home and Asia .

 

[GreatPig]

Try here.

And a mention of it here, also with a reference to the above article.

GP

 

[numbercruncher]

These guys havnt even hit the peak of subprime arm resets yet, the best is yet to come!

I read The Fed has some obscure ruling that lets them lend to banks and accept all the risks themselves, might see that in play this year hey ?

 

[dhukka]

I exchanged mails with Michael Shedlock author of Mish's Global Economic Tend Analysis blog who has his finger on the pulse. He seems to think it is much ado about nothing. He knew about the restrictions on transfers 3 weeks ago but said it was placed on individuals using PC's and that if it were affecting large corporates we would have definitely heard something about it by now.

If you're interested, he had good post on Citi a couple of months back.

 

[numbercruncher]

Yes good read especially the last line ....

Those focusing on the dividend picture at Citigroup (especially those who do not think that dividend will be cut) are sure focusing on the wrong picture. Citigroup is fighting for its financial life.

 

[Smurf1976]

IHe knew about the restrictions on transfers 3 weeks ago but said it was placed on individuals using PC's and that if it were affecting large corporates we would have definitely heard something about it by now.

I think most will be more concerned about the effects on their personal finances than large corporates. If you can't withdraw you money then, regardless of the reason or who else is affected, that's about as bad as it gets.

 

[dhukka]

I think most will be more concerned about the effects on their personal finances than large corporates. If you can't withdraw you money then, regardless of the reason or who else is affected, that's about as bad as it gets.

The reference to corporates is with respect to wire transfers. The original article states individuals had their wire transfers limited to $2,000 per day. I'd say individuals could probably live with that. On the other hand, that type of restriction placed on corporates would be very disruptive.

With respect to ATM transctions it appears people could withdraw money however their limit was halved. So someone with a $1,000 limit had it chopped to $500. No doubt inconvenient but bearable.

 

[Smurf1976]

The reference to corporates is with respect to wire transfers. The original article states individuals had their wire transfers limited to $2,000 per day. I'd say individuals could probably live with that. On the other hand, that type of restriction placed on corporates would be very disruptive.

With respect to ATM transctions it appears people could withdraw money however their limit was halved. So someone with a $1,000 limit had it chopped to $500. No doubt inconvenient but bearable.

Though you would be completely stuffed if you were setting up your first home, buying a car, wanting to buy shares or had some other reason for wanting to access a lot of cash.

 

[Uncle Festivus]

But why have they done this? Will this be a trend for internet banking? Why line up outside Northern Rock when you can do an electronic transfer?
Is it time for :fan?

 

[theasxgorilla]

Yes good read especially the last line ....

Interesting. I feel little sympathy for Citigroup. I remember getting a low interest credit card through them once, intending to use the low rate on the balance transfer for as long as possible and when I refused to use the card for Christmas shopping that year they slugged me with a $250 (approx) once off, miscellaneous fee. Cumuppence anyone?

ASX.G

 

[Uncle Festivus]

An interesting article/opinion

http://www.minyanville.com/articles/C-jpm-bac-WB-wfc/index/a/15423

Forget about support and resistance levels, retracements, entry points/stops, overbought/oversold, and all the other technical stuff, and just look at the picture. The stocks of the largest financial institutions on the planet, Citigroup (C), Bank of America (BAC), Wachovia (WB), Wells Fargo (WFC), JP Morgan Chase (JPM) – the institutions where money for our finance-based economy lives – are showing extreme distress, more so than at any other time including ’02, when the market was in free fall; and back then, debt derivatives (CDS) outstanding were a fraction of what exists today. What’s even more worrisome is that the CDS on these banks’ debt seem to be confirming such level of distress.

 

[ithatheekret]

Just listened to Hank on CNBC , tripped on his tongue from the onset ......

" we have a structure problem with benefits "

" he thinks , banks should take on more losses "
(now I get it ...... that's why the save the banks plan came out huh .)

he didn't say will or must , just , he thinks oh and he can't use red pens .

.......... best darn Forrest Gump impersonation I've seen in awhile .

Nice bit of side spin on the 2/28's , partially spat it out that they still don't have ALL the data from the banks and mortgage lenders , good save by the team , in a we won't go there moment .

Clearly a worried man ........ and then finished it all off with he believes in the USD and the finale was a team back pat on the bench moment .

Clearly the winner here was Austar , I mean I actually paid to hear that crap .

Kudlow can't see recession and Jims got a recession proof stock ....... oxymorons or less oxy .

Bread and butter elections ..........

 

[rub92me]

Rumours for Citigroup are not looking good.

Citigroup write-offs could reach $24 billion

By MarketWatch
Last update: 3:52 a.m. EST Jan. 14, LONDON (MarketWatch) -- Citigroup may write off up to $24 billion over subprime- and credit-related losses, putting as many as 20,000 jobs at risk, according to a published report on Monday.
Citi also may cut its dividend payment, CNBC reported, without attribution.
Citigroup (C:Citigroup, Inc Last: 29.06+0.50+1.75%) may raise as much as $15 billion from selling stakes to foreign and domestic investors, the report said.
The CNBC report, as well as one from The Wall Street Journal, pointed to some of those shares being sold to Saudi Arabia Prince Alwaleed bin Talal, already Citi's largest shareholder.

 

[wayneL]

Another Jim Cramer rant... on financials doom and a few home truths.

http://www.cnbc.com/id/15840232?video=624755222&play=1

Cramer joins the non-muppets.

 

[ithatheekret]

There go the dreams for a couple more years stateside ........ we know what's next .